Annual Report 2006-2007

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REGISTERED OFFICE Airport Management Centre

1 Fenton Court DevelopmentGroup|ANNUALAirport REPORT 2006/2007 Marrara Northern Territory 0812 Tel: +61 8 8920 1811 Fax: +61 8 8920 1800 Website: www.ntapl.com.au

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FINANCIAL YEAR ENDING 2007 2006 2005 2004 2003 Passengers: DIA 1,654,000 1,440,000 1,386,000 1,182,000 1,085,000 ASA 628,000 607,000 603,000 610,000 570,000 Total 2,282,000 2,047,000 1,989,000 1,792,000 1,655,000 Landed Tonnes: DIA 801,000 662,000 621,000 539,000 525,000 ASA 247,000 204,000 233,000 239,000 223,000 TCA 4,200 5,300 4,900 4,200 6,400 Total 1,052,200 871,300 858,900 782,200 754,400 Aeronautical Charges (ex GST): Passenger Facilitation Charge ($/pax) ** DIA 6.73 5.00 4.50 3.50 2.50 ASA 5.44 5.30 4.50 3.50 2.50 TCA n/a n/a n/a n/a n/a Airport Services Charge ($/pax) ** DIA 6.37 5.75 5.50 5.50 4.98 ASA 6.61 6.45 5.50 5.50 4.98 TCA 18.00 18.00 18.00 18.00 18.00 Landing Charge General Aviation $/MTOW ** OUR THEME DIA International 19.00 18.50 18.00 16.00 15.01 DIA Domestic 19.00 18.50 18.00 16.00 14.00 This year’s annual report for Airport Development ASA 19.00 18.50 18.00 17.25 16.50 Group (ADG) has been inspired by the most valuable TCA 23.00 23.00 23.00 23.00 23.00 asset at Darwin, Alice Springs and Tennant Creek Revenue $000s*** Airports, our people. DIA 39,129 28,161 23,238 18,843 15,651 ASA 11,408 10,057 9,062 8,174 6,581 The stories and images from our staff, contractors and TCA 151 211 153 183 196 others that contribute to the airports, highlight the Other (38) (39) 635 6 96 diverse and sometimes complex roles that must be Total ADG 50,650 38,390 33,088 27,206 22,524 knitted together to effectively run our businesses. EBITDA $000s DIA 23,876 16,749 12,770 10,017 6,869 Employing over 60 full-time staff and contracting many ASA 7,401 6,445 5,349 4,871 3,770 other personnel to provide key airport services, ADG is TCA (38) 15 (22) - 16 proud to provide critical infrastructure to the people of Other 0 0 677 51 96 the Northern Territory. Total ADG 31,239 23,209 18,774 14,939 10,751 Capital Expenditure $000s 2006/07 was an exciting year with the development of DIA 23,276 20,731 17,771 4,197 1,797 commercial land, increasing passenger numbers and ASA 7,568 1,831 1,035 970 277 TCA 112 1 5 3 14 signiﬁ cant revenue growth. Total ADG 30,956 22,563 18,811 5,170 2,088 Employees DIA 55 42 42 41 36 ASA 11 11 11 12 13 TCA 11122 Total ADG 67 54 54 55 51 ** as at 30 June *** excludes safety & security charge revenue / expenses CONTENTS Our Mission 2 Chair’s Report 4 Chief Executive Ofﬁ cer’s Report 6 Company Overview 8 Business Overview 12 Route Development 18 Safety and Security 20 Year in Review 22 Environment 24 The Community 26 Board of Directors 28 Financial Report 31 OUR MISSION

“ In the interests of all stakeholders, operate an airport business that is world class in ﬁ nancial and environmental performance, customer service and safety and security, and is recognized as a key contributor and participant in the economic growth of the Northern Territory”

VISION Airport Development Group’s vision is to be a world class Airport business. That is, we aspire to achieve the following: • Standards of efﬁ ciency and safety that equal world’s best practice; VALUES • Compliance with all operational, regulatory and We will demonstrate our values by action and environmental standards; we will: • Customer satisfaction with facilities, • Deliver on our commitments to customers, commensurate with the scale of our airports; shareholders and other stakeholders; • Staff and management excellence; • Act with honesty and integrity in all our dealings with employees and customers; • Appropriate returns to shareholders on invested capital that reﬂ ect the underlying risk; and • Demonstrate our professionalism and credibility in all areas of our operations; • All commercial opportunities are fully investigated, and where appropriate developed • Respond in a timely and appropriate manner to and implemented. stakeholder needs; • Reward staff for their endeavours on a fair and equitable basis; • Accept the responsibility and accountability that goes with the challenge of delivering objectives and plans; • Respect all people who we work and have contact with; and • Excel in providing the highest quality service and support to our stakeholders.

2 “ I enjoy the fact that I’m playing a part in the dynamic and ever changing environment of the aviation industry”

2007 HIGHLIGHTS • Operating revenue of $50.6M (2006: $38.9M) an increase of 32% on the previous year. • Earnings before interest, tax, depreciation and amortisation (EBITDA) of $31.2M (2006: $23.2M) an increase of 34% on the prior year. • Total of 1,654,000 passengers at Darwin International Airport (2006: 1,440,000), an increase of 15% on the previous ﬁ nancial year. • Construction, completion and opening at Darwin International Airport of the Bunnings Warehouse in November 2006 including associated roads and infrastructure in DIA’s new commercial precinct. • Construction of Darwin International Airport’s fourth aerobridge on Bay 1 and major refurbishment of the three other existing aerobridges. • Construction of the Checked Bag Screening system at Alice Springs Airport, including installation of new check-in counters, tourist desk counters and baggage reclaim areas. • Announcement by Tiger Airways of their ﬁ rst Australian domestic services to include Darwin International and Alice Springs Airports commencing December 2007.

TOM GANLEY – As the Chief Financial Offi cer leads the fi nance, administration and IT teams. and Company Secretary, Tom has worked in the Says Tom, “The aviation industry is characterised airport industry for over 19 years, seven of those by long serving, dedicated professionals in spent with Airport Development Group based in which I’m proud of my association with and Darwin. “I’ve seen fi rst-hand the challenges of the the fulfi lment it brings to my life. Outside of pilots strike in 1989, and the unfortunate demise work, my 3 year old son provides signifi cant of Ansett in 2001. Today however, the industry entertainment for my wife and I, and together has never been stronger”. As an Executive, Tom we enjoy the relaxed lifestyle of the Top End. supports the Chief Executive and the Board of Weather permitting I enjoy a hit of tennis, and if Airport Development Group in the development not, experimenting in the kitchen with a glass of of the organisation’s strategic direction. Tom also wine (or two!).” ANNUAL REPORT 2006/2007 3 CHAIR’S REPORT

On behalf of my Our shareholders are predominantly Australian fellow board members superannuation and investment funds and the I am pleased to continued investment in and returns generated present the Annual from ADG will benefi t many thousands of Report for the Airport Australian retirees, many of them residents in the Development Group Northern Territory. (ADG) communicating to all stakeholders Once again on behalf of the ADG Board, our review of the I commend the Annual Report to you and performance of our congratulate the Executive Team and staff for airport businesses in the Northern Territory. They delivering outstanding results in the 2007 fi nancial are Darwin International (DIA), Alice Springs (ASA) year. Not only have the fi nancial results been and Tennant Creek Airports (TCA). exemplary but a number of key initiatives and developments achieved during the year will help This will be my last report as Chair of ADG as I am position the business well for a prosperous future. about to take maternity leave and look forward to the birth of my fi rst child. The shareholders will Jill Rossouw appoint a new Chair with the skill and experience Chair and Director in the aviation sector necessary to take ADG forward and deliver the exciting and rewarding future that we believe awaits our Northern Territory Airport businesses.

2007 was a highly successful year in which revenues grew by 32%, EBITDA grew by 34% (up 100% over past three years). On a combined basis, Darwin International and Alice Springs Airports handled 2.3 million passengers representing a 9% increase on the previous period.

This year also heralded the cornerstone Bunnings development that will open up the Bagot Road Commercial Precinct. Together with construction of Osgood Drive and the associated intersection, this will unlock the underdeveloped commercial land at Darwin International Airport.

4 “ I like the fact that I’m involved in a variety of jobs which makes my job interesting and I don’t get tied down to a speciﬁ c task all day everyday”

PATRICK LONG – For the last 14 variety of jobs which makes my job months, Patrick has worked as a interesting and I don’t get tied down Groundsman for Darwin International to a specifi c task all day everyday”. Airport. “I assist in airport projects Outside of work, Patrick enjoys getting both airside and landside and I also out of town, camping, fi shing and help maintain landscapes and the having BBQ’s for his mates and family maintenance of surrounding fi xtures. at home. I like the fact that I’m involved in a CHIEF EXECUTIVE OFFICER’S REPORT

“I think I have the best job in the Northern Territory”

The Airport Development Group (ADG) owns and operates three airports in the Northern Territory; Darwin International, Alice Springs and Tennant Creek Airports.

In our direct airport companies, we employ over 60 full time employees and contract many other personnel to provide key airport services. Together with our airline customers, we handled over 2.3 million arriving, departing and transit passengers. The combination of all of the on airport and off airport businesses that support them contribute over 1.5% of the GSP of the NT and employ over 1600 people. Our airports are critical infrastructure for the Northern Territory and we will continue to invest in them in order to play our key role in generating growth and opportunity for all Territorians.

Once again, we enjoyed an outstanding year from a fi nancial perspective. Revenues grew by 32% and our EBITDA increased by 34%. This above plan performance was driven by stronger than anticipated passenger growth of 9% across all airports, a result substantially underpinned by 16% growth in the Darwin domestic market, international traffi c (up 11%) and slender growth in the Alice Springs market (up 3%). It was also supported by key development initiatives that came to fruition during the year. These included the opening of the Bagot Road commercial precinct with the construction of Osgood Drive and the Bagot Road intersection and opening of the Bunnings Warehouse. We also made signifi cant headway in renegotiating the cost sharing agreement with the Department of Defence in relation to Joint User Facilities, and after submitting compelling arguments to the

6 Productivity Commission, we were removed from We continued to support our community with the the group of price monitored airports effective 1st major recipient of our Corporate Giving Programme July 2007. in the 2007 ﬁ nancial year being Camp Quality as well as Wildcare, the Salvation Army and other In line with Federal Government directives, local community organisations and charities. we continued to enhance our levels of security preparedness with the relatively smooth I would like to take this opportunity to thank my introduction of LAGS (Liquids, Aerosols and Gels staff, our contractors, airline customers, border Screening) for all international passengers and agencies and the travelling public who along with the implementation of 100% CBS (Checked Bags other key stakeholders, have contributed to our Screening) at Alice Springs Airport (operational success and whose future efforts will determine from 1st August 2007). This project and its the progress and prosperity of our airport business ancillary works consumed approximately $7 in the coming years. million at Alice Springs Airport and brings our total associated capital investment in aviation security Ian Kew across ADG to approximately $20 million. This Chief Executive Ofﬁ cer represents a substantial sum in anyone’s terms and when the additional ongoing operating costs are added to this cost, the increase in airport security charges and their resultant impact on airline ticket prices is substantial. The effect of this is to dampen demand for air travel to our regional destinations in Central Australia and the Top End. To date, despite representations from airlines, the Northern Territory Government and ourselves, we have not received any form of relief from the Federal Government.

My team have worked hard to deliver excellent ﬁ nancial results and deliver $31M of capital projects during the period and operate our facilities in a safe, secure and environmentally responsible manner for the beneﬁ t of all stakeholders.

IAN KEW – Ian has held the position an important contribution to the of Chief Executive Offi cer at Airport future development of the Northern Development Group (based in Territory. I like that this business Darwin) for the last seven years. He is 24/7, however when I do get says, “Running ADG is a challenge, the chance to escape work, I enjoy a privilege and I enjoy the diversity spending time with my family, putting of the role. The impact of our the fi nishing touches to the house we business on all Territorians means have built and learning how to fi sh in that we all feel that we are making my recently acquired boat.”

7 COMPANY OVERVIEW

AIRPORT DEVELOPMENT GROUP In 1998 Airport Development Group Pty Ltd ADG owns 100% of Northern Territory Airports (ADG), through its subsidiaries, acquired a lease Pty Ltd (NTA) which in turn owns 100% of from the Commonwealth Government for the Darwin International Airport Pty Ltd (DIA) and three Northern Territory Airports: Alice Springs Airport Pty Ltd (ASA) who are - Darwin International Airport, respectively the holders of leases over Darwin - Alice Springs Airport and International Airport and Alice Springs Airport. - Tennant Creek Airport. ADG also owns 100% of Tennant Creek Airport ADG is majority Australian owned and is made Pty Ltd. up of four shareholders comprising: - Industry Funds Management (Nominees 2) Pty Ltd - Hastings Funds Management (Australian Infrastructure Fund), - Perpetual Investments - AAHC 3 Pty Ltd

COMPANY STRUCTURE

Hastings Funds RBC Global Services Industry Funds Management Limited Australia Nominees AAHC 3 Pty Ltd Management (Australian Pty Limited 10% (Nominees 2) Pty Limited Infrastructure Fund) (Perpetual Investments) 50.05% 25.4% 14.55%

Airport Development Group Pty Ltd

Northern Territory Airports Pty Ltd Tennant Creek Airport Pty Ltd

Darwin International Airport Pty Ltd Alice Springs Airport Pty Ltd

8 “ My role is varied and I get to work outdoors, that’s what I like most about my job. No two days are ever the same.”

TREACY WHITE – Treacy has been include allocating parking bays to working at Darwin International aircraft, issuing licences and permits Airport for just on 16 months as an for airside driving and vehicles, Operations Offi cer, more commonly dealing with aircraft emergencies known in airport lingo as “Safety and dispersing with birds on 2”. “Generally my role is to provide the airfi eld. Outside of work, support to the “Safety 1” Offi cer Treacy enjoys working on projects in the day-to-day running of the around her home, being outdoors, airport airside” says Treacy. This can entertaining friends and cooking.

ANNUAL REPORT 2006/2007 9 COMPANY OVERVIEW

DARWIN (DIA) The Northern Territory covers 1,346,200 square kilometres of vast open spaces and is blessed with world famous natural attractions and resources. More than ﬁ fty nationalities make up the Territory’s population which currently sits at just over 210,000 people.

Darwin, founded as Australia’s most northerly harbour port in 1869, is the tropical capital of the Territory and is considered the “gateway” to Asia due to its close proximity to our Northern neighbours.

Darwin International Airport (DIA) is located within a short distance of the CBD and operates ALICE SPRINGS (ASA) curfew free 24 hours a day. This allows airlines to Located at “the heart” of Australia in the red maximise operating schedules and plan appropriate centre, Alice Springs is a major tourist destination connecting services to other major centres which in the Northern Territory where a majority of are subject to curfew. passengers who pass through Alice Springs Airport are visitors to the region. Qantas, Jetstar, Garuda Indonesia, Royal Brunei, Airnorth, Tiger Airways, Virgin Blue and Skywest all The town of Alice Springs plays an important role currently serve the destination of Darwin. in the development of its surrounding areas and is dependent on air transport because of its remote Twenty three General Aviation (GA), two helicopter location. The Airport also provides an important and one cargo operator have facilities at Darwin link to the Territory’s remote communities. International Airport. General Aviation is important to the Territory given the small, widely scattered Alice Springs Airport is located 14 kilometres remote communities and the lack of all weather from the township and occupies 3550 hectares. roads on the mainland and numerous islands off Of this area, 750 hectares are used directly for the coast of Arnhem Land. aeronautical purposes. The Airport has a two runway system, operates 24 hours a day curfew DIA is a Joint User Airport (JUA) with the RAAF free and handles all forms of domestic and who occupies a major military base and maintains regional aviation services. Together with some the joint user areas, including runways and military operations, the airport also caters for taxiways with DIA. The total area of 1527 hectares international charter ﬂ ights. has been designated as airport land of which 311 area assigned to DIA and the remaining 1216 hectares to RAAF.

10 “The rewards for me are the satisfaction of high community acceptance of the Airport as an essential part of the local infrastructure, especially being such a remote town”

TENNANT CREEK (TCA) The township of Tennant Creek is located 500 kilometres north of Alice Springs and 1,000 kilometres south of Darwin. The town is surrounded to the east by the huge expanse of land called the Barkly Tablelands which supports some of Australia’s premier cattle stations. The population of the Barkly region is approximately 6,000.

Tennant Creek Airport is located 1kilometre from the town on approximately 323 hectares with facilities for commuter and general aviation trafﬁ c. The airﬁ eld caters to mining companies and small predominantly aboriginal communities in the surrounding area.

The terminal is available for RPT passengers and the main sealed apron can cater for one F28 Fellowship or BA146 or Gulfstream V, plus several smaller aircraft.

DON MCDONALD – Connellan offered him his Don has been involved with ﬁ rst job as a trainee pilot airports and aviation for over in 1965. Today, Don says 30 years as a professional “My job is wonderfully engineer and a management broad with a high level of executive, having held a responsibility, especially for wide variety of appointments a guy like me with a “hands around the country during on style”. When time permits, this time. While Don feels Don still enjoys touring he still has “a bit left in him” around Central Australia but before retirement, he is often now is more often a visitor to amused when reﬂ ecting on Melbourne where his family the fact that he now resides and children live. in “The Alice” where Eddie

ANNUAL REPORT 2006/2007 11 BUSINESS OVERVIEW

ADG FINANCIAL RESULTS SUMMARY ($000S)

FINANCIAL YEAR ENDING 2007 ADG 2006 ADG 2005 ADG 2004 ADG 2003 ADG 2002 ADG

REVENUE: Aeronautical 34,466 26,614 22,023 17,562 13,385 7,863 Trading 6,844 5,617 4,984 4,609 4,534 4,261 Property 6,673 5,435 4,514 4,080 3,821 4,651 Other 2,667 724 1,567 955 784 709 Total (1) 50,650 38,390 33,088 27,206 22,524 17,484

EXPENDITURE: Labour & staff overheads 6,000 5,079 5,127 4,790 4,382 3,353 Services & utilities 4,350 2,417 2,284 2,134 1,887 1,664 Administration 4,629 3,884 3,524 3,182 2,702 2,044 Maintenance 2,176 1,865 2,108 1,537 1,424 990 TSA expenses 2,256 1,936 1,271 624 1,378 813 Total 19,411 15,181 14,314 12,267 11,773 8,864

EBITDA: 31,239 23,209 18,774 14,939 10,751 8,620

Depreciation 8,400 6,492 5,553 5,782 5,631 5,400 Amortisation 234 234 234 641 557 558

EBIT: 22,605 16,483 12,987 8,516 4,563 2,662

Net borrowing costs 9,406 7,937 6,361 5,773 6,797 5,400 Abnormals / Income tax (38,856) 1,294 1,900 (2,370) 4,998 (9)

NET PROFIT/(LOSS) AFTER TAX: 52,055 7,252 4,726 5,113 (7,232) (2,729)

(1) Revenue excludes passenger security, checked bag screening, additional security measures and counter terrorist ﬁ rst response charges which are levied such that revenue received is equally offset by expenses incurred. In 2006/07 revenue from security charges was $5.64 million

“My main role is to maintain and repair electrical equipment on the airport grounds at Darwin” 12 LUNAR ECLIPSE – As a Technical Services Ofﬁ cer at Darwin International Airport for the last nine years, Lunar has become “part of the furniture” in our team. “My main role is to maintain and repair electrical equipment on the airport grounds at Darwin” says Lunar. A keen environmentalist, when not at work he is involved in local wildlife rescue, rehabilitation and environmental issues.

FINANCIAL PERFORMANCE fi rst in Darwin International Airport’s new an increase in ongoing scheduled and ADG had another excellent fi nancial year, commercial precinct. preventative maintenance regimes. ended 30 June 2007. ADG performance for the 2006/07 fi nancial year again Other income, including interest income also An increase in consulting, staff relocation exceeded budget expectations with strong returned good results with good cash fl ow and recruitment and travel costs have growth in traffi c numbers and the returns management during the year and strong contributed to an increase in general on commercial and retail developments returns on fi xed to fl oating interest rate swap administration expenditure. This has resulted beginning to fl ow through. EBITDA for the agreements. primarily from changes to staff during the year was $31.2M, an increase of 34% on fi nancial year and the use of consultants as the previous year. Total expenses for the fi nancial year were required to cover temporary vacancies. $19.4M. Revenue increased 32% to $50.6M Costs associated with the technical services for the 2006/07 year. Strong growth in Staffi ng costs, which make up approximately agreement (TSA) increased by 17% as a passenger numbers, particularly from one-third of total ADG expenditure increased result of ADG’s overall better than budget domestic services, resulted in an increase in during the fi nancial year as a result of performance. aeronautical revenue to $34.5M, up 30% a number of signifi cant staff changes, on the previous year. increased staffi ng levels associated with additional capital expenditure and related Trading revenue also grew strongly, projects as well as increased labour rates increasing by 22% to $6.8M over the related to the growing Northern Territory previous year’s results. Increased passenger economy. ADG Revenue by Source numbers contributed to the excellent results, $M particularly so in car rental revenue. JR Duty Services and utilities costs grew to $4.4M 60 Free was awarded the Duty Free contract at but were close to budget expectations. This Darwin International Airport during the year. is largely driven from the increase in usage 50 The refurbishment of the duty free outlet and from new commercial properties and tenants 40 improved contract terms has also contributed on airport, with a large portion of electricity to the positive result. and services costs being recharged to 30 tenants based on their usage.

Property revenue continued to grow 20 steadily with the returns from a number of Maintenance expenditure also increased, but commercial developments now being felt. was in line with budget expectations coming 10 Bunnings Warehouse opened in November in at $2.2M. Continued ageing of facilities 0 2006 – a 14,000 square metre facility – the across all of ADG’s airports, as well as new 2003 2004 2005 2006 2007 commercial properties have necessitated Aeronautical Retail Property Other

ANNUAL REPORT 2006/2007 13 BUSINESS OVERVIEW

ADG Expenses by Source $M

0 2003 2004 2005 2006 2007 OPERATIONAL PERFORMANCE OVERVIEW Labour Services General Administration & Utilities The 2007 ﬁ nancial year saw a return to strong Property Maintenance TSA domestic growth at both Darwin and Alice Springs Airports on the back of a growing and robust Northern Territory economy. ADG EBITDA $M Domestic passengers at Darwin International 35 Airport grew by 16% to 1,282,000. Jetstar commenced services to Darwin in May 2006, 30 replacing some Qantas services but offering 25 additional frequency and capacity. A 12% increase in domestic seats over the previous year, resulting 20 largely from the commencement of low cost carrier 15 services, coupled with the use of larger aircraft by other existing airlines where necessary has largely 10 driven the strong growth in domestic trafﬁ c.

5 At Alice Springs Airport, despite a steadying of 0 2003 2004 2005 2006 2007 trafﬁ c in prior years, 2007 saw a return to growth in passenger numbers of approximately 3% for the year. Further international direct charters from Japan operated through Alice Springs Airport during August 2006 and May 2007, the third successful year of operation of these charters.

14 “This is a job I enjoy walking into everyday. The position offers a wide variety of tasks - from general daily commitments to project management and applying my design skills with computer aided design software to the Aviation divisions across the ADG structure”

International passengers at Darwin International Airport were 11% higher than the previous year, totaling 372,000 including transits. The growth in transit trafﬁ c through Darwin International Airport, is largely as a result of scheduling changes to the Cairns-Darwin-Singapore services operated by the Qantas Group. Jetstar Asia commenced operating this service through Darwin International Airport in October 2006, while Qantas operated additional ﬂ ights to Singapore to cope with demand where necessary.

Tiger Airways continued to grow strongly and provide much needed capacity into the Top End’s important South East Asian neighbour, Singapore, with the commencement of a ﬁ fth weekly Darwin- Singapore service from June 2007. Tiger Airways have announced they will commence domestic services at both Darwin International and Alice Springs Airports from December 2007, whilst increasing to daily Singapore services at the same time.

SIMON HATFIELD – Previously at Gold Simon has been involved in the Aviation Coast Airport, Simon Hatfi eld has been industry for six years having started employed with Alice Springs Airport for overseas with the Dublin and Cork Airports fi ve months as the Manager of Operations. with Aer Rianta in Ireland. A challenging position in terms of location, Airports and aviation are big part of both Central Australia has been called home for Simon’s work and personal life. On the Simon’s beautiful wife Michelle and his weekends, you’ll fi nd Simon hopping into son Oliver (aged 3) who is just as much a glider and soaring the skies over Alice an aircraft fanatic as his father. Springs. “The thermals out here are the best in the country I’ve ever experienced”. ANNUAL REPORT 2006/2007 15 BUSINESS OVERVIEW

Total Passengers 000’s

2,500 ADG OPERATIONAL PERFORMANCE SUMMARY

2,000 FINANCIAL YEAR ENDING 2007 ADG 2006 ADG 2005 ADG 2004 ADG 2003 ADG 2002 ADG

1,500 DARWIN INTERNTIONAL

AIRPORT 1,000 PASSENGERS: Domestic 1,282,000 1,106,000 1,105,000 985,000 875,000 800,000 5,00 International 372,000 334,000 281,000 197,000 210,000 290,000 0 Total 1,654,000 1,440,000 1,386,000 1,182,000 1,085,000 1,090,000 2003 2004 2005 2006 2007 AIRCRAFT MOVEMENTS: Domestic International Regular Public Transport 19,400 17,700 18,300 18,200 18,000 18,700 General Aviation 55,900 53,600 48,700 44,300 40,600 49,000 Darwin Airport Passengers Total 75,300 71,300 67,000 62,500 58,600 67,700 000’s

LANDED TONNES: 2,000 Total landed tonnes 800,682 662,000 621,000 539,000 525,000 590,000

1,500 ALICE SPRINGS AIRPORT PASSENGERS: 1,000 Domestic / Int’l charters 628,000 607,000 603,000 610,000 570,000 520,000 Total 628,000 607,000 603,000 610,000 570,000 520,000 5,00 AIRCRAFT MOVEMENTS: Regular Public Transport 6,200 6,200 6,900 7,800 7,500 8,200 0 General Aviation 14,600 15,700 16,000 16,700 16,200 17,900 2003 2004 2005 2006 2007

Total 20,800 21,900 22,900 24,500 23,700 26,100 Domestic International LANDED TONNES: Total landed tonnes 247,000 204,000 233,000 239,000 223,000 206,000 Darwin Aircraft Movements 000’s

80 TENNANT CREEK AIRPORT AIRCRAFT MOVEMENTS: 70 Total aircraft movements 2,800 3,300 3,000 2,200 2,800 3,600 60 LANDED TONNES: 50 Total landed tonnes 4,200 5,300 4,900 4,200 6,400 7,400 40

0 2003 2004 2005 2006 2007

Regular Public Transport General Aviation

“The most enjoyable part of my job which I’ve held for the last two and a half years, is resolving payment issues with clients and achieving targets to contain debt to an acceptance level” Passengers by Type 2006/07

16%

56% 28%

Pax DIA DomD Pax ASA Dom Pax DIA Int

Alice Springs Airport Passengers 000’s

640 630 620 610 600 590 580 570 560 550 540 2003 2004 2005 2006 2007

Domestic

Alice Springs Aircraft Movements 000’s

0 2003 2004 2005 2006 2007

Regular Public Transport General Aviation

MAXINE HOWLETT – “The most Client Services Manager is to collect enjoyable part of my job which I’ve aircraft landing charges, rental charges held for the last two and a half years, for the Commercial Property Portfolio, is resolving payment issues with clients collection of payment for parking and achieving targets to contain debt infringements and the disposal of motor to an acceptable level” says Maxine. vehicles abandoned at the airport. “Also, it’s extremely satisfying to locate When not at work, Maxine enjoys horse debtors who we’ve experienced some riding, golf, painting and keeping ﬁ t at issues with and ultimately resolving the gym. the debts with them.” Maxine’s role of 17 ROUTE DEVELOPMENT

The close partnership between Airport Capacity and frequency increases were also Development Group (ADG) and the Northern recorded by Qantas Group carriers. Services from Territory Government has been critical in securing Cairns, Gove and Alice Springs changed to an additional air services to the Northern Territory. all B717 operation, with higher frequencies on Within ADG the dedicated role of Aviation most sectors. Qantas also introduced increased Development Director is held by Jim Parashos, capacity on Sydney services with new three times who is also a member of the Northern Territory per week daylight services, and readily upgauged Aviation Committee. aircraft from B737 to B767 to meet necessary demand. The key aspects of ADG’s aviation development include: Jetstar’s presence in Northern Australia grew, - Identifying growth or underserved markets, with the carrier replacing Australian Airlines and preparing business cases for improved services on the Cairns-Darwin-Singapore sector. air access; Jetstar operates this sector daily, and has also - Working with carriers to increase passengers boosted seat capacity on the Melbourne-Darwin on existing services; and sector. - Enhancing air access to Alice Springs via scheduled domestic and international Further growth is expected by Darwin-based charter operations. carrier Airnorth, which received its ﬁ rst Embraer E-170 jet in 2007. Airnorth now operates twice During the year Darwin International Airport weekly Darwin-Bali services, and delivery of more moved a step closer to being the best “Northern regional jets is set to create opportunities for new Gateway” to Asia. services to Darwin.

Tiger Airways announced increases in Singapore- In conjunction with the Northern Territory Darwin services from fi ve per week to daily, the Government, promotion of International Charters launch of daily Melbourne-Darwin services, and continues. Japan Airlines (JAL) operated a entry into the Alice Springs market in the future. number of charter services in the last 12 months, Tiger Airways has increased annual seat capacity and for the fi rst time included both Alice Springs into Darwin International Airport from 75,000 and Darwin passenger itineraries. to 260,000 seats per annum since commencing services two years ago. For the fi rst time, travellers between southern Australia and Asia will have the opportunity of a Darwin stopover. Tiger Airways services will further highlight the benefi t of a Northern Australian gateway in Darwin.

“I enjoy the fact that no two days are ever the same. In my role I work with the airlines and Government agencies to facilitate increased air services to our airport” 18 JIM PARASHOS – Working in the role stakeholders, but also assists in positive of Aviation Development Director, Jim’s tourism, trade and business outcomes been with Airport Development Group for the NT.” In his spare time Jim enjoys for just over a year. He says “I enjoy the odd game of golf, reading and the fact that no two days are ever getting out to see all that the NT has the same. In my role I work with the to offer. Since moving “up north”, Jim’s airlines and Government agencies to hosted nearly 100 friends and family facilitate increased air services to our from Melbourne who couldn’t wait to airports, which not only beneﬁ ts our visit beautiful Darwin in the dry season.

DESTINATION ROUTES

Brunei SiSSingSingaporengn ap

Bali Darwin

Broome Cairns Tennant Creek

Alice Springs

Brisbane

Perth

Sydney

Adelaide Melbourne

ANNUAL REPORT 2006/2007 19 SAFETY AND SECURITY

ADG continues its ongoing commitment to Enhanced Inspection providing safe and secure facilities at Darwin, Alice Additional inspection measures are to be Springs and Tennant Creek Airports. This is being implemented at both Darwin International and achieved through partnerships at both local and Alice Springs Airport. This bolstering of security national levels with the Department of Transport will include the implementation of further and Regional Services (DoTaRS), airlines, law inspection and screening points both within enforcement agencies, airport communities the terminals and airside. ADG continues to and other Government departments. Through collaborate closely with DoTaRS to ensure these this collaboration, ADG is able to maintain its new requirements are successfully implemented. obligations and remain well poised to meet any future challenges in today’s dynamic security Checked Bag Screening environment. On 1 August 2007, eleven security designated airports in Australia were mandated to have NEW SECURITY MEASURES checked bag screening in place for all domestic fl ights departing from terminals. Whilst Darwin Unifi ed Policing Model International Airport had been successfully Alice Springs and Darwin Airports now have a full completing this requirement since 2005 (well in complement of Australian Federal Police offi cers advance of regulatory requirements), a new $7 dedicated to Counter Terrorism First Response million facility was constructed at Alice Springs (CTFR) and the Australian Uniformed Police Airport. As a result of this, screening of 100% (AUP), who carry out a community policing of all checked bags is now carried out at both role. These are led by dedicated Airport Police airports. Commanders at each airport. This policing presence enables both a proactive and reactive Liquids Aerosols and Gels approach to crimes and offences and is a welcome The Australian Government mandated security addition to both airport communities. screening procedures to restrict the carriage of liquids, aerosols and gels onto international fl ights. Regional Airports Funding Program (RAFP) Commencing on the 31 March 2007, these new Funding has been made available by the security measures required Darwin International Australian Federal Government to improve security Airport to provide additional passenger screening at Tennant Creek Airport. On completion of works, infrastructure, as well as additional screening staff. this airport will have improved fencing, increased lighting and closed circuit television.

20 “I enjoy the challenges and opportunities in my new role and also learning so many new aspects of aviation and the business of security”.

Emily Graham has worked of staff and team management. Says with Chubb Security at Darwin Emily “I enjoy the challenges and International Airport for two years and opportunities in my new role and was recently promoted to the role of also learning so many new aspects of Acting Chubb Aviation Manager. aviation and the business of security”. Emily’s job involves ensuring In her spare time, Emily enjoys compliance with National Aviation participating in outdoor sports and Regulations and database, rostering events with her six year old daughter. YEAR IN REVIEW

“I love the outdoor tropical lifestyle and the multicultural society of Darwin”.

DARWIN INTERNATIONAL AIRPORT The major project completed at Darwin International Airport during 2006/07 was the 14,000 square metre Bunnings Warehouse. The development includes more than 7,000 square metres of trading ﬂ oor space, a garden centre, trade timber yard and more than 400 car bays. Bunnings is the anchor tenant and catalyst for development in the Business Park Precinct and was ofﬁ cially opened on 14 November 2006.

New road infrastructure connected to this project includes two new entry and exit points. One leads from Bagot Road and the other from McMillans Road near Sabine Road. Osgood Drive was also constructed which runs from Bagot Road through to Charles Eaton Drive and the Airport Terminal.

Construction was completed on Aerobridge 1 (the fourth aerobridge facility at Darwin International Airport) and major refurbishment of the three other aerobridges was also completed. The apron-drive aerobridge is the ﬁ rst of it’s type in Australia and can be driven to multiple positions on the apron to accommodate various sizes of aircraft. To the credit of all staff and contractors involved in this project, the Airport continued to operate normally with no interference from construction.

Darwin Airport Terminal works recently completed included renovations to the terminal, car park and approach roads. Upgrades included a new entrance road to the public car park, a bigger and better designed car park, an extra boom gate and new undercover walkways to the terminal.

Techy Masero was born in Chile and natural materials on a monumental came to live in Darwin in 1980’s. scale and created the magniﬁ cent Her works are now instantly brolga pieces that now are mounted recognisable in the Northern in front of the Airport Management Territory as an integral part of Centre in Darwin. outdoor festivals and community events. Techy works primarily in

22 The redesign also included the terminal building, Operations access to the terminal, the separation of Beyond the routine scheduled passenger fl ights, commercial passenger vehicles (taxis, private hire two successful rounds of “fi rst port of call” cars and buses), a dedicated undercover taxi rank, international charter fl ights from Japan were and public drop off and pick up areas. undertaken. In addition to this, the Boeing Commercial Airplane Company undertook some Works on refurbishment of the Airport further hot weather aircraft testing with Management Centre building were completed. a B777-300.

Revenues grew above our expectations driven in The Airport continued a successful program of Darwin by growth of 16% in domestic passenger preparing and participating in exercises including numbers and 11% for international passengers. local airport emergency and terminal evacuation training, as well as major agency exercises ALICE SPRINGS AIRPORT arranged by the NT Government, including a three Projects day airﬁ eld security exercise at Katherine Airport The major project carried out during 2006/07 at and a local “Tracks are for Trains” simulated Alice Springs Airport was the implementation disaster. of the Federal Government’s direction to install a Checked Baggage Screening system. As an Community ancillary part of this work, the check-in counters The Airport maintained its active contribution to were rationalised and rebuilt to modern OH&S community events with support for the Desert standards and in addition to this, the rental car Festival, the Chamber of Commerce Business and Tour Desks were relocated. The principal Expo, the biennial Masters Games and continuing component of this project was the consolidation involvement with CATIA the peak tourism body. and replacement of the mechanical baggage handling system to a single common user The Airport also assisted with “Welcome to arrangement that included an inline explosive trace Country” signage and the operation of the detection x-ray. “Day of Difference” charity ﬂ ight.

Away from the terminal, the high voltage electrical TENNANT CREEK distribution system was upgraded with new switch Unfortunately this year saw the cessation of gear and the completion of a ring main loop for commercial commuter ﬂ ights to Tennant Creek. improved safety and redundancy. As well a new DoTaRS conducted it’s annual lease review of all 100 space long term car park with an automated ADG from Tennant Creek for the ﬁ rst time since payment system was completed. privatisation.

ANNUAL REPORT 2006/2007 23 ENVIRONMENT

The Airport Development Group (ADG) has An assessment of the potential for treating in cooperation with Defence and is seen as continued its commitment to operating with and recycling sewage water from the airport a positive initiative towards effective cross- the highest respect for the environment. for re-use on site was undertaken. The boundary coordination of land management We have led by example with our ongoing study found that while onsite treatment issues. responsible management of environmental would be possible, the construction and issues through the implementation of the operation costs of such a project would not Also during 2006/07 the Department Environment Strategies for each airport. The be economically feasible at this time. As of Defence undertook a study into the key initiatives have been: a result, we were unable to proceed with design, functionality and repair options for the project immediately however further the Rapid Creek Flood Mitigation Weir on SUSTAINABILITY investigations are being carried out to the Darwin International Airport northern Climate change and sustainability are generate a feasible business case for the boundary. The study found that the weir was foremost in ADG’s business. water re-use project. performing as designed in terms of its fl ood The effort of our team has been focused mitigation function, however the structure on establishing a robust sustainability The commitment to sustainable operation had been damaged by a series of high fl ow framework across the company in order to was underwritten by the announcement in events since its construction in 1986. As deliver improved sustainability outcomes 2007 that Alice Springs had been named a a result, its condition is deteriorating and in the future through new projects and “Solar City” under the Federal Government’s the energy dissipation area of the weir is improved operational effi ciencies. Solar Cities Programme. As part of the no longer working at capacity to prevent town application, Alice Springs Airport has high energy fl ows to the creek banks further With this framework in place, we committed to undertake a feasibility study downstream. A number of remedial options undertook a number of specifi c studies for solar energy generation at its terminal have been proposed by the study and these looking at opportunities in energy and building with the potential for further works will likely be undertaken by Defence water management – which led to the government funding to the project should it within the next two years. air-conditioning systems at both Darwin prove feasible. International and Alice Springs Airport MONITORING terminals being reviewed. The review in CONSERVATION Cooperative review of available stormwater Darwin resulted in the generation of a During January 2007, over 700 new native monitoring data within the Rapid Creek CO2 monitoring system that allowed the tree seedlings were planted on Airport and catchment was carried out by NT terminal chiller system to respond to the Defence land banks of Rapid Creek. The Government Water Resources section in level of occupancy in the building. It is purpose of this was to improve habitat order to ascertain the ecological health of the projected that this system will reduce energy quality in the Rapid Creek Environment creek system and to assess the suitability consumption of the terminal chiller system Reserve and to stabilise the creek banks of the current monitoring in measuring the by approximately 14% per annum, with the against erosion. Darwin International declared benefi cial uses (i.e. for ecological associated reduction in carbon emissions. Airport has since been contracted by the value and human use). In this process Department of Defence to regularly maintain Darwin International Airport contributed this area to allow the new trees the best its historical monitoring data for use and chance of survival. This is the fi rst such analysis. cooperative rehabilitation project undertaken

“I enjoy all aspects of my job – one minute I’m discussing hearing protection the next I’m working on studies of environmental impacts for a $100 million dollar project.” 24 JILL HOLDSWORTH – A relatively safety and environment management new member of the team, Jill has even more rewarding. Outside of been in her role of Health Safety & work, I enjoy spending time with my Environmental Systems Coordinator gorgeous husband, two wonderful for around six months. “I’m boys and my pet German Shepherd. passionate about the environment, I play and coach basketball and am health and safety and enjoy working also an Operations Ofﬁ cer with the in the aviation industry. This RAAF (active Reserves) posted with makes my role as developing and 92 Wing Detachment B. implementing best practices for

Key ﬁ ndings from this review were: • Given its urban setting, Rapid Creek is in good health; • Grab sampling for chemical monitoring of creek and drains is of limited value as results may not be meaningfully related to trends in creek health; • A monitoring programme based around sampling of biological indicators (freshwater macro invertebrates and ﬁ sh) would provide the most meaningful tool for assessment of the declared ecological value of the Rapid Creek.

Based on the recommendations from this review, Darwin International Airport is now working with the range of land holders across the creek system – NT Government, Darwin City Council and the Department of Defence to participate in a coordinated monitoring program. retaining and releasing water over a longer RISK MANAGEMENT period and redistributing fl ows to prevent ADG are managing its third party STORMWATER RETENTION BASIN fl ooding. environmental risk through a web based Flood studies results of the western airfi eld tenant environmental management plan and land (and adjoining Darwin International Ornithological consultants were contracted auditing program. Resources continue to be Airport development land) indicated potential to assess bird attraction potential and to allocated to this program to ensure uptake of for erosion and fl ooding during powerful provide management recommendations the program by all key operators on airport. stormwater peak fl ow events off airport. To for the retention basin. The assessment better manage stormwater runoff from the indicated that due to the relatively short airfi eld, a permanent stormwater retention retention period of the water and the basin on Department of Defence land was proposed vegetation management regime the constructed. The stormwater retention new basin is unlikely to provide a source of basin will reduce the effects of fl ooding by bird attraction.

ANNUAL REPORT 2006/2007 25 THE COMMUNITY

“My most enjoyable task at the present is working on the Corporate Giving Programme”

THE COMMUNITY ADG management and staff continued their strong commitment and support for the community throughout 2006/07 through the Corporate Giving Programme and other fundraising initiatives.

Throughout the year, staff are encouraged to develop fundraising initiatives, manage the process and distribute funds to those charitable organisations nominated by ADG.

The organisations supported by ADG are varied and include the sporting ﬁ eld, the arts, emergency services, the environment and charitable organisations such as Salvation Army, Variety Club NT and the RSPCA who all who beneﬁ ted from this year’s staff fundraising programmes.

As a result of the Darwin International Airport Charity Golf Day, staff and sponsors raised over $10,000 for the Variety the children’s charity (NT). Thanks to the generosity of the many stakeholders and sponsors, together with a donation from the Corporate Giving Programme budget, many Top End kids will beneﬁ t directly as a result of the Variety Club’s efforts.

Several staff from Darwin, Alice Springs and Tennant Creek Airports also participated in the “2007 Airport to Airport Bash”, organised to beneﬁ t the Variety Children’s Charity. Some of the staff that participated in the Bash have said that it was “a once in a lifetime opportunity” and that the feeling of meeting some of the kids on the Bash that had beneﬁ ted from the Variety Club’s efforts was, quite simply, “overwhelming”.

“The smile on the faces of the children is the most 26 rewarding part of being part of Variety.” LAURA CAMPBELL – Laura has worked to the DIA team. Laura says her most at Reception at the Terminal Control enjoyable task at present is working Centre at Darwin International Airport on the Corporate Giving Programme. (DIA) for just over 12 months. Laura Outside of work, she loves playing assists with the daily running of the indoor beach volleyball, the social aspect Terminal which include passenger and/ of living in Darwin and exploring our or tenant enquiries, issuing visitor and beautiful Territory with friends on road ASIC cards and gives general assistance trips.

Kerry O’Brien has been a Board member of meeting some outstanding people whilst for Variety the children’s charity for the having lots of laughs along the way. In my last eight years. “I have ventured off on a spare time I play beach volleyball with Variety Bash which is our biggest fundraiser, a wonderful bunch of friends and every and have also been the Chairman of a year we go interstate to play in one of the couple of Variety Splash’s” says Kerry. Masters tournaments. Variety the children’s “For me, Variety the children’s charity is charity has been an inspiration to me and I all about lending a hand to the kids of the would recommend to one and all to become Northern Territory who are in need. Not involved, I’ll guarantee it will be more than only do I get to be part of the fabulous worth your while.” Variety ‘family’, I also have the good fortune ANNUAL REPORT 2006/2007 27 MS JILL ROSSOUW CHRIS BARLOW (CHAIR) KYLE MANGINI

Chair – resigned October 2007 Chris Barlow has previously held the Kyle Mangini is the Head of Infrastructure Jill is an Investment Director at Industry positions of Chief Executive Ofﬁ cer and and Specialised Funds with Industry Funds Funds Management (“IFM”), having joined Managing Director of Australia Paciﬁ c Management. Kyle has over sixteen years IFM in October 2004. Her responsibilities Airports Corporation and operator of experience in investment banking, including cover reviewing and managing infrastructure Melbourne and Launceston Airports. He is senior roles with Credit Suisse and Swiss investments, and transaction origination also the new Chairman of the Board of the Bank. and completion. Jill’s role also involves the Melbourne Convention Visitors Bureau.

BOARD OF DIRECTORS ongoing management and monitoring of He has extensive infrastructure experience investments in the Australian airport and Mr Barlow was named Australian Aviation both in Australia and overseas, including a residential aged care sectors. Personality of the Year at the 2006 recent role acting as an advisory director to Australian Airports Association Awards the Flinders Group. Jill has 12 years’ project fi nance advisory, after 35 years in the aviation industry in corporate fi nance and private equity Australia, Canada and the United Kingdom. Whilst at Credit Suisse, Kyle played a experience, most recently as an Associate signifi cant role in the sale of Victoria’s Director with the PricewaterhouseCoopers His time with the Australia Pacifi c Airports electricity and gas assets, with a divesture Project Finance group, responsible for Corporation saw a fi ve year, $500 million value in excess of $35 billion. At Swiss advising on business divestments and expansion and upgrade of Melbourne Bank, Kyle was the lead banker in the infrastructure projects at various stages Airport. restructuring of the BOT system of in the procurement cycle. Prior to this, Napacor (in the Philippines), one of the Jill worked in GE Capital’s private equity Mr Barlow joined BAA (formerly the largest public/private BOT programmes arm where she gained experience in the British Airports Authority) in 1969 as an in the world. evaluation, due diligence, investment and Engineering Project Manager. He has a reporting in relation to investee companies. BSc (Honours) in Civil Engineering and is a His relevant transaction experience member of the Institute of Civil Engineers includes the execution of mergers, Jill holds a Graduate Diploma in Applied and the Institute of Transport. acquisitions, divestitures, initial public Finance and Investment from the offerings, public bond offerings, Rule 144A Securities Institute of Australia, a Master private placements, commercial bank of Philosophy in Finance from University of facilities and derivatives. Kyle has a Double Cambridge (UK) and Bachelor of Commerce Major in Economics and Government from the University of Natal (South Africa). from Wesleyan University, Middletown, Connecticut. Jill was appointed to the Board of the Royal Victorian Eye and Ear Hospital in July 2005, and as Chairperson of the Board’s Audit Committee on 1 January 2006.

EXECUTIVE MANAGEMENT TEAM Chief Executive Ofﬁ cer Ian Kew General Manager, Alice Springs & Tennant Creek Airport Don McDonald Aviation Development Director Jim Parashos GM Development, Operations & Maintenance John Diggins Operations Manager Darwin International Airport Bob Calaby Airport & Development Manager Stuart Ainslie Chief Financial Ofﬁ cer & Company Secretary Tom Ganley Director Property Alan Revell Health, Safety & Environment Systems Coordinator Jill Holdsworth HR Manager Steve Marshall

28 Security Manager Mark Hill PETER MCGREGOR ROBERT FORTE STUART CONDIE

(Resigned November 2007) Peter McGregor joined Hastings in Robert has been Portfolio Manager, January 2006 and is a Director and Infrastructure since joining Perpetual Stuart Condie is currently Planning & Chief Operating Offi cer of the ASX listed Investments in February 2003. He is Surface Access Director at BAA Ltd and Australian Infrastructure Fund. He is responsible for portfolio construction and responsible for airport and local authority Chairman of Ports Pty Ltd (Port of Geelong) acquisition activities within Perpetual’s planning, noise and air quality, aerodrome and a Director of Australia Pacifi c Airports infrastructure business, including its safeguarding and surface access issues Corporation (Melbourne and Launceston valuation research, analysis and modelling. across the Group. He is also a non-executive Airports), Queensland Airports Ltd (Gold Director of Heathrow Express Operating Coast, Townsville and Mt Isa), and Airport Robert has over seventeen years industry Company, Westralia Airports Corporation Development Group (Darwin, Alice Springs experience and prior to joining Perpetual (and other companies associated with Perth and Tennant Creek Airports). worked for National Asset Management’s Airport), BAA’s Pension Fund and is a Board unlisted equity portfolio, where he Member of the Brussels based, SESAR Joint Prior to joining Hastings, Peter was an conducted strategic portfolio analysis, Undertaking. executive director and Head of Infrastructure acquisition, due diligence and a variety & Utilities at the investment banking fi rm of quantitative and asset management Since joining BAA in 1985 Stuart has held Goldman Sachs JBWere. services for client investors. Other roles a variety of management posts including within the National Australia Bank Group Corporate Treasurer, Head of International Peter has more than twenty years involved international strategy development Strategy, Head of IT at Gatwick and Director experience in the Australian investment for the combined National/MLC Wealth of Economics & Regulation. Stuart has an banking industry. He has been involved Management business and investment MA from Cambridge and an MBA from in numerous major transactions in the performance management for National’s City University and is married with two infrastructure sector, including equity capital insurance and superannuation subsidiary. daughters. markets, mergers and acquisitions, and Prior to that he spent over three years with debt capital markets assignments. one of Australia’s largest infrastructure investors, where he prepared analysis and reports for the Fund’s Board and Investment Committee in respect to its infrastructure and private equity investments. Robert has broad experience in the infrastructure sector including transport, power, timberlands, waste and social infrastructure.

ANNUAL REPORT 2006/2007 29

Airport Development Group FINANCIAL REPORT 2006/2007 CONTENTS Directors’ Report 33 Auditor’s Independence Declaration 35 Income Statement 36 Balance Sheet 37 Statement of Changes in Equity 38 Cash Flow Statement 39 Notes to the Financial Statements 40 Directors’ Declaration 61 Independent Audit Report 62 Fast Facts 64

32 DIRECTORS’ REPORT Your directors submit their report for the year ended 30 June 2007

Directors The names of the directors of the company in ofﬁ ce during the ﬁ nancial period and until the date of this report are shown in note 28.

Principal Activities The principal activity of the Airport Development Group Pty Ltd (ADGPL) was that of a holding company.

No signiﬁ cant changes in the nature of these activities occurred during the year.

Review of operations The consolidated entity sustained an after tax profi t of $52,055,058 for the reporting period ended 30 June 2007. This compares with the 2005/06 after tax profi t of $7,252,208. Consolidated revenue, including unrealised gains on cash fl ow hedges and fair value adjustment on investment property, increased from $43,890,486 to $117,755,963 whilst total consolidated expenses including depreciation, fi nance costs and income tax increased from $36,638,278 to $65,700,905.

Dividends ADGPL has paid fully franked dividends of $11,350,000 during the year (2006: $15,900,000 unfranked). No other dividends have been paid, declared or recommended during the year.

Signiﬁ cant Changes in the State of Affairs No signiﬁ cant change in the nature of the company’s state of affairs occurred during the year.

Matters Subsequent to the End of the Financial Year There have been no events, which have arisen since the end of the fi nancial year, which have signifi cantly affected or may signifi cantly affect; (i) the operations of the consolidated entity and parent company; (ii) the results of those operations; or (iii) the state of affairs of the consolidated entity and parent company in subsequent fi nancial years.

Likely Developments and Expected Results of Operations Information on likely developments in the operations of the company and the expected results of operations have not been included in this report because the directors believe it would be likely to result in unreasonable prejudice to the company.

Environment Regulation The entity operates under the Airport (Environmental Protection) Regulations 1997 that form part of the Airports Act 1996. Other Commonwealth and Northern Territory legislation applies where regulation under the Airports Act 1996 has not been prescribed. The Air Navigation Act 1920 also applies to the entity, particularly in respect of noise.

There have been no signiﬁ cant breaches of the applicable legislation.

Risk and Audit Committee The board is responsible for the overall governance of the company including setting the company’s strategic direction, establishing goals for management and monitoring the achievement of those goals. Directors are accountable to the shareholders for the company’s performance. To assist in the execution of its corporate governance responsibilities, the board has in place a Risk and Audit Committee (RAAC). This committee currently consists of three directors. The RAAC meets a minimum of four times per year and operates under a charter approved by the board.

Insurance of Offi cers The company has not, during or since the fi nancial year, in respect of any person who is or has been an offi cer or auditor of the company or a related body corporate indemnifi ed or made any relevant agreement for indemnifying against a liability incurred as an offi cer, including costs and expenses in successfully defending legal proceedings.

During the fi nancial year the company has paid a premium to insure all directors and offi cers who are, or have been, directors and offi cers of the company and its controlled entities against certain liabilities they may incur in carrying out their duties for the company. The terms of the policy prohibits disclosure of the nature of the liabilities, the amount of insurance cover and the amount of the premium.

Directors as listed in note 28 to this report are covered under this insurance policy. The ofﬁ cers of the company covered by the insurance include the directors, executive ofﬁ cers and employees.

ANNUAL REPORT 2006/2007 33 DIRECTORS’ REPORT continued Your directors submit their report for the year ended 30 June 2007

Directors Benefi ts and Emoluments No director has received or become entitled to receive, during or since the fi nancial year, a benefi t because of a contract made by the parent entity or a related body corporate with a director, a fi rm of which a director is a member or an entity in which a director has a substantial fi nancial interest.

No remuneration has been paid or is payable to any director of the company.

Share Options No options to shares in ADGPL have been granted during the ﬁ nancial year and there were no options outstanding at the end of the ﬁ nancial year.

Corporate Structure ADGPL is a company limited by shares that is incorporated and domiciled in Australia. The registered ofﬁ ce is 1 Fenton Court Marrara NT 0812. The entities that it had one hundred percent ownership of during the ﬁ nancial year are Northern Territory Airports Pty Ltd and Tennant Creek Airport Pty Ltd.

Employees Airport Development Group Pty Ltd employed 67 employees as at 30 June 2007. (2006: 54 employees)

Auditor’s Independence Declaration A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 35.

This report is made in accordance with a resolution of the directors.

Director Director

Place: Melbourne

Date: 10 December 2007

34 Tel 61 8 8982 1444 Fax 61 8 8982 1400 Level 2 9-11 Cavenagh Street Darwin NT 0800 Australia GPO Box 3470 Darwin NT 0801 Australia www.meritpartners.com.au

AUDITOR’S INDEPENDENCE DECLARATION TO THE DIRECTORS OF AIRPORT DEVELOPMENT GROUP PTY LTD

In relation to our audit of the ﬁ nancial report of Airport Development Group Pty Ltd for the ﬁ nancial year ended 30 June 2007, to the best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001 or any applicable code of professional conduct.

Merit Partners

Matthew Kennon Partner

Darwin Date:

partners Amin Islam Rosemary Campbell Matthew Kennon Steven Lai INCOME STATEMENT For the ﬁ nancial year ended 30 June 2007

CONSOLIDATED COMPANY Note 2007 $ 2006 $ 2007 $ 2006 $

Revenues from continuing operations 2(b) 56,291,170 43,413,623 12,958,524 13,112,554

Salaries and employee beneﬁ ts 5,999,867 5,078,654 0 0 Maintenance expense 2,176,067 1,865,403 0 0 Security and passenger screening charges 5,640,771 5,024,620 0 0 Technical Services Agreement expense 2,255,877 1,936,467 0 0 Services and utilities expense 4,350,346 2,416,784 0 0 Other expenses 4,629,114 3,882,357 0 0

EBITDA* 31,239,128 23,209,338 12,958,524 13,112,554

Net gain on fair value of investment property 2(d) 59,002,055 0 0 0 Other income 2(c) 2,462,738 476,863 0 0 Depreciation and amortisation expense 2(a) (8,634,777) (6,726,031) 0 0 Finance costs 2(a) (9,406,170) (7,936,946) 0 0

Proﬁ t before income tax expense 74,662,974 9,023,224 12,958,524 13,112,554 Income tax expense 3 (22,607,916) (1,771,016) (3,747,600) (3,933,767)

Proﬁ t attributable to members of the entity 52,055,058 7,252,208 9,210,924 9,178,787

* EBITDA represents Earnings before Interest expense, Tax, Fair value adjustments on Investment Property, Unrealised gains, Depreciation and Amortisation

The accompanying notes form part of these ﬁ nancial statements.

36 BALANCE SHEET As at 30 June 2007

CONSOLIDATED COMPANY Note 2007 $ 2006 $ 2007 $ 2006 $ Current Assets Cash and cash equivalents 4 16,492,423 1,820,075 0 0 Trade and other receivables 5 6,667,090 5,211,109 0 0 Prepaid rent 6 65,880 65,880 0 0 Other fi nancial assets 8 3,586,930 1,387,874 0 0 Other 7 572,307 108,911 0 0 Total Current Assets 27,384,630 8,593,849 0 0 Non-Current Assets Other fi nancial assets 9 0 0 95,766,535 99,641,669 Prepaid rent 10 5,863,327 5,929,207 0 0 Investment properties 11 119,906,400 47,132,956 0 0 Investments 12 0 0 24 24 Infrastructure, plant and equipment 13 137,789,419 129,005,750 0 0 Other intangibles 14 15,146,908 15,315,362 0 0 Goodwill 15 13,963,732 13,963,732 0 0 Deferred tax assets 3 989,599 865,899 0 0 Total Non-Current Assets 293,659,385 212,212,906 95,766,559 99,641,693 Total Assets 321,044,015 220,806,755 95,766,559 99,641,693 Current Liabilities Trade and other payables 16 15,219,897 8,499,826 0 0 Borrowings 17 0 549,706 0 0 Provisions 18 1,110,194 1,246,439 0 0 Income tax payable 2,385,897 3,031,369 2,385,897 3,031,369 Total Current Liabilities 18,715,988 13,327,340 2,385,897 3,031,369 Non-Current Liabilities Other payables 3 0 0 3,007,103 4,097,689 Borrowings 19 158,676,899 122,453,794 0 0 Provisions 20 391,085 100,384 0 0 Deferred tax liabilities 3 43,543,618 25,650,188 0 0 Total Non Current Liabilities 202,611,602 148,204,366 3,007,103 4,097,689 Total Liabilities 221,327,590 161,531,706 5,393,000 7,129,058 Net Assets 99,716,425 59,275,049 90,373,559 92,512,635 Equity Contributed equity 21 60,765,344 60,765,344 60,765,344 60,765,344 Reserves 22 0 263,682 0 0 Retained profi ts / (losses) 38,951,081 (1,753,977) 29,608,215 31,747,291 Total Equity 99,716,425 59,275,049 90,373,559 92,512,635

The accompanying notes form part of these ﬁ nancial statements.

ANNUAL REPORT 2006/2007 37 STATEMENT OF CHANGES IN EQUITY For the ﬁ nancial year ended 30 June 2007

CONTRIBUTED EQUITY RESERVES RETAINED PROFITS (a) TOTAL Company Balance at 1 July 2005 60,765,344 0 38,468,504 99,233,848 Proﬁ t attributable to the members of the entity 0 0 9,178,787 9,178,787 Dividends paid 0 0 (15,900,000) (15,900,000) Balance at 30 June 2006 60,765,344 0 31,747,291 92,512,635 Proﬁ t attributable to the members of the entity 0 0 9,210,924 9,210,924 Dividends paid 0 0 (11,350,000) (11,350,000) Balance at 30 June 2007 60,765,344 0 29,608,215 90,373,559

CONTRIBUTED EQUITY RESERVES RETAINED PROFITS/ TOTAL (LOSSES) (a) Consolidated Balance at 1 July 2005 60,765,344 263,682 6,893,815 67,922,841 Proﬁ t attributable to the members of the entity 0 0 7,252,208 7,252,208 Dividends paid 0 0 (15,900,000) (15,900,000) Balance at 30 June 2006 60,765,344 263,682 (1,753,977) 59,275,049 Proﬁ t attributable to the members of the entity 0 0 52,055,058 52,055,058 Movement in hedge reserve 0 (263,682) 0 (263,682) Dividends paid 0 0 (11,350,000) (11,350,000) Balance at 30 June 2007 60,765,344 0 38,951,081 99,716,425

(a) Retained proﬁ ts/(losses) includes unrealised gains not available for distribution to shareholders of $72,312,682 (2006: $72,312,682)

The accompanying notes form part of these ﬁ nancial statements

38 CASH FLOW STATEMENT For the ﬁ nancial year ended 30 June 2007

CONSOLIDATED COMPANY Note 2007 $ 2006 $ 2007 $ 2006 $

Cash Flows from Operating Activities Receipts from customers 54,331,614 46,477,269 0 0 Payments to suppliers and employees (21,345,278) (19,999,696) 0 0 Interest received 408,767 328,984 12,958,524 13,112,554 Finance costs (2,278,696) (7,923,973) 0 0 Income tax paid (5,483,657) (1,140,850) (5,483,657) (1,140,850) Goods and Services Tax paid (3,182,791) (2,249,995) 0 0 Net cash ﬂ ows from operating activities 29 22,449,959 15,491,739 7,474,867 11,971,704

Cash Flows from Investing Activities Acquisition of infrastructure, plant and equipment (31,827,905) (22,353,309) 0 0 Proceeds from sale of plant and equipment 0 46,018 0 0 Advances from / (to) related parties 0 0 3,875,133 3,928,296 Net cash ﬂ ows (used in) / from investing activities (31,827,905) (22,307,291) 3,875,133 3,928,296

Cash Flows from Financing Activities Proceeds from borrowings 35,950,000 135,000,000 0 0 Repayment of borrowings 0 (114,200,000) 0 0 Dividends paid (11,350,000) (15,900,000) (11,350,000) (15,900,000) Net cash fl ows from / (used in) fi nancing activities 24,600,000 4,900,000 (11,350,000) (15,900,000) Net increase / (decrease) in cash held 15,222,054 (1,915,552) 0 0 Cash at beginning of the fi nancial year 1,270,369 3,185,921 0 0 Cash at end of the fi nancial year 29 16,492,423 1,270,369 0 0

The accompanying notes form part of these ﬁ nancial statements.

ANNUAL REPORT 2006/2007 39 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Statement of compliance The ﬁ nancial report is a general purpose ﬁ nancial report prepared in accordance with Accounting Standards, including Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

The ﬁ nancial report covers the consolidated group of Airport Development Group Pty Ltd (ADGPL) and controlled entities and ADGPL as an individual parent entity.

The ﬁ nancial report complies with Australian Accounting Standards, which includes Australian equivalents to International Financial Reporting Standards (A-IFRS). The ﬁ nancial report also complies with International Financial Reporting Standards (IFRS).

The ﬁ nancial statements were authorised for issue by the directors on 10 December 2007.

(b) Basis of preparation The ﬁ nancial report has been prepared on the basis of historical cost, except for the revaluation of certain non-current assets and ﬁ nancial instruments. Cost is based on the fair values of the consideration given in exchange for assets.

In the application of A-IFRS management is required to make judgments, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstance, the results of which form the basis of making the judgments. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Judgments made by management in the application of A-IFRS that have signifi cant effects on the fi nancial statements and estimates with a signifi cant risk of material adjustments in the next year are disclosed, where applicable, in the relevant notes to the fi nancial statements.

Accounting policies are selected and applied in a manner which ensures that the resulting ﬁ nancial information satisﬁ es the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported.

The accounting policies set out below have been applied in preparing the ﬁ nancial statements for the year ended 30 June 2007 and the comparative information presented in these ﬁ nancial statements for the year ended 30 June 2006.

(c) Income Tax Income tax disclosed in the income statement comprises of current and deferred tax. Income tax is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the year, using rates enacted or substantially enacted at balance date, and any adjustments to tax payable in respect of previous years.

Deferred income tax is provided on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for ﬁ nancial reporting purposes.

Deferred income tax liabilities are recognised for all taxable temporary differences except: • when the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting proﬁ t nor taxable proﬁ t or loss; or • when the taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, except where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profi t will be available against which the deductible temporary differences, and the carry-forward of unused tax credits and unused tax losses can be utilised, except: • when the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profi t nor taxable profi t or loss; or • when the deductible temporary difference is associated with investments in subsidiaries, associates and interest in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profi t will be available against which the temporary differences can be utilised.

40 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007

The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufﬁ cient taxable proﬁ t will be available to allow all or part of the deferred income tax asset to be utilised.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised of the liability is settled, based on tax rates (and tax laws) that have been enacted or substantially enacted at the balance sheet date.

Tax consolidation legislation The head entity, Airport Development Group Pty Ltd, and the controlled entities in the tax consolidated group continue to account for their own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidated group continues to be a stand alone entity. The head entity recognises the current tax liabilities (or assets) and the deferred tax assets arising from the unused tax losses and unused tax credits assumed from the controlled entities in the tax consolidated group.

Members of the tax consolidated group have entered into a tax funding arrangement under which the wholly-owned entities fully compensate the head entity for any current tax payable assumed and are compensated by the head entity for any current tax receivable and deferred tax assets relating to unused tax losses or unused tax credits that are transferred to the head entity under the tax consolidation legislation. The amounts receivable or payable under the tax funding arrangement are due upon receipt of the funding advice from the head entity, which is issued as soon as practical after the end of each ﬁ nancial year. The head entity may also require payment of interim funding amounts to assist with its obligations to pay tax instalments. The funding amounts are recognised as current intercompany receivables and payables.

(d) Foreign Currency Translation

Transactions Foreign currency transactions are initially translated into Australian currency at the rate of exchange at the date of the transaction. At balance date, amounts payable and receivable in foreign currencies are translated to Australian currency at rates of exchange current at that date. Resulting exchange differences are brought to account in determining the proﬁ t and loss for the year.

(e) Revenue Recognition Revenue is recognised when it is probable that the economic beneﬁ ts will ﬂ ow to the entity and the revenue can be reliably measured.

Aeronautical Charges Comprises: • Passenger based charges for scheduled regular public transport (rpt) passenger services. • Landing based charges for unscheduled, general aviation or non passenger services. • Passenger based charges for the use of terminal facilities. • Safety and security charges levied on a per passenger basis in respect of government mandated security measures.

Aeronautical revenue is recognised in the period in which passengers and aircraft physically arrive at the airport.

Trading Income Comprises concessionaire rent, overages, and other charges received including income from public car parks. Income from concessionaire overages is recognised in the period in which the sales to which it relates arises, other rentals are recognised in the period for which the rental relates according to the lease documentation.

Income from public carparks is recognised on a cash basis.

Property Comprises income from company owned terminals, buildings and other leased areas. Lease income is recognised on a straight line basis over the term of the lease.

(f) Trade and Other Receivables Trade receivables are recognised and carried at original invoice amount.

Recoverability of trade debtors is reviewed on an ongoing basis. A provision for debts is raised where recoverability is deemed to be doubtful. Debts, which are known to be unrecoverable, are written off.

Receivables from related parties are recognised and carried at the nominal amount due.

ANNUAL REPORT 2006/2007 41 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007

(g) Acquisition of Assets The cost method of accounting is used for all acquisition of assets regardless of whether shares or other assets are acquired. Cost is determined as the fair value of the assets given up at the date of acquisition plus costs incidental to the acquisition.

(h) Impairment of Assets At each reporting date the entity reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If such an indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash ﬂ ows that are independent from other assets, the entity estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Goodwill, intangible assets with indeﬁ nite lives and intangible assets not yet available for use are tested for impairment annually and whenever there is an indication that the asset may be impaired. An impairment of goodwill is not subsequently reversed.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash fl ows are discounted to their present value using a pre-tax discount rate that refl ects current market assessments of the time value of money and the risks specifi c to the asset for which the estimates of future cash fl ows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised in the income statement immediately, unless the relevant asset is carried at fair value, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised in the income statement immediately, unless the relevant asset is carried at fair value, in which case the reversal of the impairment loss is treated as a revaluation increase.

(i) Infrastructure, Plant and Equipment

(i) Cost and Valuation The cost base assigned to infrastructure assets and plant and equipment is set out in note 13.

(ii) Depreciation and Amortisation Infrastructure, plant and equipment (including infrastructure assets under lease) have been depreciated using the straight-line method based upon the estimated useful life of the assets to the consolidated entity.

Depreciation and amortisation rates used are as follows:

2007 2006

Runways Taxiways & Aprons 2.5% - 15.0% 2.5% - 15.0% Roads & Car parks 2.5% - 20.0% 2.5% - 20.0% Fences & Gates 5.0% - 15.0% 5.0% - 15.0% Lighting & Visual Aids 5.0% - 10.0% 5.0% - 10.0% Passenger Terminal 2.13% - 33.3% 2.13% - 33.3% Buildings 2.13% - 25.0% 1.67% - 33.3% Plant & Equipment 4.0% - 33.3% 4.0% - 33.3% Vehicles 15.0% - 20.0% 15.0% - 20.0% Computer Equipment 15.0% - 33.3% 15.0% - 33.3%

(iii) Leasehold Improvements Leasehold improvements have been amortised over the shorter of the unexpired period of the lease and estimated useful life of the improvements.

(iv) Derecognition and disposal An item of infrastructure, plant and equipment is derecognised upon disposal or when no further future economic beneﬁ ts are expected from its use or disposal.

42 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007

Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement in the year the asset is derecognised.

(j) Leases Leases of fi xed assets where substantially all the risks and benefi ts incidental to the ownership of the asset, but not the legal ownership that are transferred to the entity are classifi ed as fi nance leases.

Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair value of the leased property or the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period.

Leased assets are depreciated on a straight-line basis over their estimated useful lives where it is likely that the entity will obtain ownership of the asset or over the term of the lease.

Lease payments for operating leases (other than prepaid rent – refer note 1(k)), where substantially all the risks and beneﬁ ts remain with the lessor, are charged as expenses in the periods in which they are incurred on a straight line basis over the lease term.

(k) Prepaid Rent The entity leases airport land from the Commonwealth of Australia, a portion of which is classiﬁ ed as a prepaid operating lease. The balance of the leased land is classiﬁ ed as Investment Properties (refer note 1(l)).

Upfront payments for operational land under lease from the Commonwealth of Australia are recognised as Prepaid Rent and the gross value is amortised over the period of the lease (including the option to renew) on a straight line basis.

(l) Investment Properties Investment property principally comprising of land, buildings and ﬁ xed plant and equipment, is held for long-term rental yields and is not occupied by the entity. The property interest held by the entity in land and buildings is by way of an operating lease. The entity has classiﬁ ed certain areas of land and buildings as being investment property being held by the entity only to earn rentals and not for being held for the use of supplying aeronautical services or administrative services.

Investment properties are measured initially at cost, including transaction costs. The carrying amount includes the cost of replacing part of an existing investment property at the time that cost is incurred if the recognition criteria are met, and excludes the costs of the day-to-day servicing of an investment property. Subsequent to initial recognition, investment properties are stated at fair value, which reﬂ ects market conditions at the balance sheet date. Gains or losses arising from changes in the fair values of investment properties are recognised in the income statement in the year in which they arise.

Investment properties are derecognised either when they have been disposed of or when the investment property is permanently withdrawn from use and no future economic beneﬁ t is expected from its disposal. Any gains or losses on the retirement of an investment property are recognised in the income statement in the year of retirement or disposal.

Transfers are made to investment property when, and only when, there is a change in use, evidenced by ending of owner-occupation, commencement of an operating lease to another party or ending of construction of development. Transfers are made from investment property when, and only when, there is a change in use, evidenced by commencement of owner-occupation or commencement of development with a view to sale.

For a transfer from investment property to owner-occupied property or inventories, the deemed cost of the property for subsequent accounting is its fair value at the date of change in use. If the property occupied by the entity as an owner-occupied property becomes an investment property, the entity accounts for such property in accordance with the policy stated under Infrastructure, Plant and Equipment (note 1(i)) up to the date of change in use. For a transfer from inventories to investment property, any difference between the fair value of the property at that date and its previous carrying amount is recognised in the income statement. When the entity completes the construction or development of a self-constructed investment property, any difference between the fair value of the property at that date and its previous carrying amount is recognised in the income statement.

(m) Goodwill Goodwill, representing the excess of the cost of acquisition over the fair value of the identiﬁ able assets, liabilities and contingent liabilities acquired, is recognised as an asset and not amortised, but tested for impairment annually and whenever there is an indication that the goodwill may be impaired. Any impairment is recognised immediately in the income statement and not subsequently reversed.

(n) Intangible assets

Lease premium The lease premium was paid on the acquisition of the airport leases from the Federal Government and is recorded at cost less accumulated amortisation

ANNUAL REPORT 2006/2007 43 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007

and impairment. Amortisation is charged on a straight line basis over the estimated useful life of the lease, being 99 years. The estimated useful life and amortisation method is reviewed at the end of each annual reporting period.

(o) Trade and Other Payables Trade and other payables represent liabilities for goods and services provided to the company prior to the end of the ﬁ nancial year and which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.

Payables to related parties are carried at the principal amount.

(p) Provisions Provisions are recognised when the entity has a present obligation (legal or constructive) as a result of a past event, it is probable that an outﬂ ow of resources embodying economic beneﬁ ts will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

When the entity expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the income statement net of any reimbursement.

If the effect of the time value of money is material, provisions are discounted using a current pre tax rate that reﬂ ects the risks speciﬁ c to the liability.

When discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing cost.

(q) Interest Bearing Loans and Borrowings All loans and borrowings are initially recognised at the fair value of the consideration received less directly attributable transaction costs. After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method.

(r) Derivative Financial Instruments The consolidated entity has entered into interest rate swap agreements to manage its exposure to interest rate risk. Further details of derivative ﬁ nancial instruments are disclosed in note 33 to the ﬁ nancial statements.

Cash Flow Hedge The effective portion of changes in the fair value of derivatives that are designated and qualify as cash ﬂ ow hedges are deferred in equity. The gain or loss relating to the ineffective portion is recognised immediately in the income statement.

Amounts deferred in equity are recycled in the income statement in the periods when the hedged item is recognised in the income statement. However, when the forecast transaction that is hedged results in the recognition of a non-ﬁ nancial asset or a non-ﬁ nancial liability, the gains and losses previously deferred in equity are transferred from equity and included in the initial measurement of the cost of the asset or liability.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualiﬁ es for hedge accounting. At that time, any cumulative gain or loss deferred in equity remains in equity and is recognised when the forecast transaction is ultimately recognised in the income statement. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was deferred in equity is recognised immediately in the income statement.

(s) Finance Costs Finance costs, except for establishment costs, are recognised as expenses in the period in which they are incurred. Finance costs include: • interest on bank overdraft and loans • senior debt agents fees • ancillary costs incurred in connection with the ongoing conduct of borrowings.

The ﬁ nance costs incurred in acquiring the borrowings (establishment costs) are offset against the principal liability and expensed over the term to maturity of the debt using an effective interest rate basis.

(t) Maintenance and Repairs Maintenance, repair costs and minor renewals, are charged as expenses as incurred.

(u) Employee benefi ts Provision is made for employee benefi ts accumulated as a result of employees rendering services up to the reporting date. These benefi ts include wages and salaries, annual leave, and long service leave.

44 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007

Liabilities arising in respect of wages and salaries, annual leave, and any other employee benefi ts expected to be settled within twelve months of the reporting date are measured at their nominal amounts based on remuneration rates which are expected to be paid when the liability is settled. All other employee benefi t liabilities are measured at the present value of the estimated future cash outfl ow to be made in respect of services provided by employees up to the reporting date. In determining the present value of future cash outfl ows, the market yield as at the reporting date on national government bonds, which have terms to maturity approximating the terms of the related liability, are used.

Employee benefi t expenses and revenues arising in respect of the following categories; • wages and salaries, non-monetary benefi ts, annual leave, long service leave, and other leave benefi ts; and • other types of employee benefi ts • are recognised against profi ts on a net basis in their respective categories.

Superannuation commitments ADGPL contributes to Australian Super Superannuation Fund in respect of all its employees.

Australian Super is a complying fund under the Commonwealth superannuation law. It is an accumulation fund and contributions by ADGPL satisfy the entity’s superannuation guarantee obligation for its employees.

(v) Cash and cash equivalents Cash and cash equivalents include cash on deposits held at call with ﬁ nancial institutions, other short term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insigniﬁ cant risk of changes in value.

For the purposes of the Cash Flow Statement, cash and cash equivalents consist of cash and cash equivalents as deﬁ ned above, net of outstanding bank overdrafts. Bank overdrafts are included within borrowings in current liabilities on the balance sheet.

(w) Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amounts of goods and services tax except where the amount of GST incurred is not recoverable from the Australian Tax Ofﬁ ce (ATO). In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense.

(x) Contributed equity Issued and paid up capital is recognised at the face value of the consideration received by the company.

Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received.

(y) Principles of consolidation The consolidated fi nancial statements are prepared by combining the fi nancial statements of all the entities that comprise the consolidated entity, being the company (the parent entity) and its subsidiaries as defi ned in Accounting Standard AASB 127 ‘Consolidated and Separate Financial Statements’. A list of subsidiaries appears in note 30 to the fi nancial statements. Consistent accounting policies are employed in the preparation and presentation of the consolidated fi nancial statements.

On acquisition, the assets, liabilities and contingent liabilities of a subsidiary are measured at their fair values at the date of acquisition. Any excess of the cost of acquisition over the fair values of the identifi able net assets acquired is recognised as goodwill. If, after reassessment, the fair values of the identifi able net assets acquired exceeds the cost of acquisition, the defi ciency is credited to profi t and loss in the period of acquisition.

The consolidated ﬁ nancial statements include the information and results of each subsidiary from the date on which the company obtains control and until such time as the company ceases to control such entity.

In preparing the consolidated ﬁ nancial statements, all intercompany balances and transactions, and unrealised proﬁ ts arising within the consolidated entity are eliminated in full.

(z) Rounding of amounts The ﬁ nancial report is presented in Australian dollars and all values are presented to the nearest dollar. Unless otherwise stated amounts have not been rounded.

(aa) New Accounting Standards and Interpretations In the current year the consolidated entity has adopted all the new and revised standards and interpretations issued by the Australian Accounting Standards Board that are relevant to its operations and effective for the current annual reporting period. These did not result in any material ﬁ nancial impact on the ﬁ nancial statements of the consolidated entity.

ANNUAL REPORT 2006/2007 45 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007

The consolidated entity has elected to early adopt AASB 8 “Operating Segments” and accordingly segment information has not been disclosed.

At the date of authorisation of the ﬁ nancial report, the following standards and interpretations were on issue and considered applicable to the entity but not yet effective:

TITLE SUMMARY IMPACT ON CONSOLIDATED ENTITY APPLICATION DATE APPLICATION FINANCIAL REPORT OF STANDARD DATE FOR COMPANY AASB 7 ‘Financial Instruments: Disclosures’ New standard replacing disclosure Disclosure standard. No direct 1/1/2007 1/7/2007 (and consequential amendments to other requirements of AASB 132. impact on the amounts included accounting standards resulting from its issue) in the fi nancial statements but will have some impact on fi nancial instrument disclosures AASB 101 ‘Presentation of Financial Effect of release of AASB 7 As above 1/1/2007 1/7/2007 Instruments’ – revised standard AASB Interpretation 10 ‘Interim Financial Prohibits reversal of certain No change to accounting policy 1/11/2006 1/7/2007 Reporting and Impairment’ impairment losses. AASB 136 required. ‘Impairment of Assets’ to take precedence over AASB134 ‘Interim No expected impact. Financial Reporting’ AASB Interpretation 12 ‘Service Concession Clarifi es how operators recognise the Management have begun to assess 1/1/2008 1/7/2008 Arrangements’ (and consequential infrastructure as a fi nancial asset the impact but believe that the entity amendments to other accounting standards and / or intangible asset – not as does not fall within the scope of this resulting from its issue) property, plant and equipment standard. Will continue to monitor developments in this area.

Other than the matters noted above, the directors anticipate that the adoption of these standards and interpretations in future periods will have no material fi nancial impact on the fi nancial statements of the consolidated entity. These standards and interpretations will be fi rst applied in the fi nancial report of the consolidated entity that relates to the annual reporting period beginning after the effective date of each pronouncement.

(bb) Company information ADGPL is a company limited by shares that is incorporated and domiciled in Australia.

The registered ofﬁ ce and principal place of business is 1 Fenton Court Marrara NT 0812.

The entities that it had one hundred percent ownership of during the ﬁ nancial year are Northern Territory Airports Pty Ltd and Tennant Creek Airport Pty Ltd.

(cc) Correction of errors

Correction of error in recording tax effect intangible assets in the previous fi nancial year Following a review of the intangible assets “lease premium” and “prepaid rent” the taxable temporary differences have been reclassifi ed as a deferred tax liability. Additionally, amortisation of prepaid rent has been reclassifi ed as non-deductible for income tax purposes. These errors had the effect of overstating the consolidated deferred tax asset by $408,465, understating the consolidated deferred tax liability by $6,393,134, and overstating the consolidated equity by $6,801,599 as at 30 June 2006.

The error also had the effect of overstating consolidated equity by $6,801,599 as at 30 June 2005.

The error has been corrected by restating each of the affected ﬁ nancial line items for the prior year as described above.

46 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007

CONSOLIDATED COMPANY 2007 $ 2006 $ 2007 $ 2006 $ NOTE 2. REVENUES AND EXPENSES (a) Expenses Interest - Interest costs on external borrowings 8,985,510 6,758,292 0 0 - Amortisation of borrowing expenses 273,101 1,078,071 0 0 - Other borrowing expenses 147,559 100,583 0 0 Total ﬁ nance costs 9,406,170 7,936,946 0 0 Depreciation - Plant and equipment 810,274 469,599 0 0 - Infrastructure assets 7,590,169 6,022,098 0 0 8,400,443 6,491,697 0 0 Amortisation - Lease premium 168,454 168,454 0 0 - Prepaid rent 65,880 65,880 0 0 234,334 234,334 0 0 Provision for doubtful debts expense 242,935 181,381 0 0 Superannuation contributions – deﬁ ned contribution plan 645,552 553,577 0 0 Net (gain) / loss on disposal of plant and equipment 0 (4,110) 0 0 Security and passenger screening charges 5,640,771 5,024,620 0 0

(b) Revenue from continuing operations Rendering of Services - Aeronautical Charges 34,466,273 26,613,554 0 0 - Trading income 6,844,124 5,616,545 0 0 - Property 6,672,640 5,435,120 0 0 - Other 7,899,366 5,415,310 0 0 Total 55,882,403 43,080,529 0 0 Other revenue - Interest 408,767 328,984 12,958,524 13,112,554 - Proceeds on sale of non current assets 0 4,110 0 0 Total revenue from continuing operations 56,291,170 43,413,623 12,958,524 13,112,554

(d) Net gain on fair value adjustment of investment property 59,002,055 0 0 0

NOTE 3. INCOME TAX Income statement Current income tax Current tax expense 4,978,147 2,626,254 3,887,557 3,933,767 Adjustments in respect of current income tax of previous years 276,404 0 (139,957) 0

Deferred income tax Deferred tax expense / (income) relating to the origination and 17,353,365 (855,238) 0 0 reversal of temporary differences Income tax expense reported in the income statement 22,607,916 1,771,016 3,747,600 3,933,767

ANNUAL REPORT 2006/2007 47 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007

CONSOLIDATED COMPANY 2007 $ 2006 $ 2007 $ 2006 $ A reconciliation between the tax expense and the product of accounting proﬁ t before income tax multiplied by the entity’s applicable income tax rate is as follows: Accounting proﬁ t before income tax 74,662,974 9,023,224 12,958,524 13,112,554 Prima facie tax at 30% 22,398,891 2,706,967 3,887,557 3,933,767 Adjustments in respect of current income tax of previous years 276,404 0 (139,957) 0 Fair value revaluations on property, plant & equipment 0 (943,933) 0 0 Expenditure not allowable for income tax purposes 11,726 8,230 0 0 Other (79,105) (248) 0 0 Income tax expense reported in the income statement 22,607,916 1,771,016 3,747,600 3,933,767

BALANCE SHEET INCOME STATEMENT

2007 $ 2006 $ 2007 $ 2006 $ Consolidated Deferred tax liabilities Intangibles 4,544,072 4,594,608 50,536 50,536 Property, plant & equipment 36,117,518 19,250,520 (16,866,997) 689,465 Prepayments 27,188 6,534 (20,652) 335 Deferred gains & losses on interest rate swap contracts 1,076,079 0 (659,717) 0 Other assets 1,778,762 1,798,526 19,764 19,764 43,543,618 25,650,188 Deferred tax assets: Property, plant & equipment 169,203 171,155 (1,953) (1,637) Payables 127,683 33,843 102,747 (3,240) Provision for doubtful debts 192,462 119,583 72,881 52,914 Other provisions 450,384 484,775 (43,299) 54,484 Tax assets 49,897 56,543 (6,675) (7,384) 989,599 865,899 (17,353,365) 855,238 Company Deferred tax liabilities Intangibles 0000 Property, plant & equipment 0 0 0 0 Prepayments 0000 Deferred gains & losses on interest rate swap contracts 0 0 0 0 Other assets 0000 00 Deferred tax assets: Property, plant & equipment 0 0 0 0 Payables 0000 Provision for doubtful debts 0 0 0 0 Other provisions 0 0 0 0 Tax assets 0000 00

48 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007

CONSOLIDATED COMPANY 2007 $ 2006 $ 2007 $ 2006 $ Other Payable to related entities – loan under tax sharing arrangement 0 0 3,007,103 4,097,689

NOTE 4. CASH AND EQUIVALENTS Cash balance comprises: - Cash on hand 42,236 16,536 0 0 - Cash at bank 16,450,187 1,803,539 0 0 Closing cash balance 16,492,423 1,820,075 0 0 Reconciliation to Cash Flow Statement For the purposes of the Cash Flow Statement, cash and cash equivalents comprise the following at the end of the ﬁ nancial year: Cash on hand 42,236 16,536 0 0 Cash at bank 16,450,187 1,803,539 0 0 Bank Overdraft (note 17) 0 (549,706) 0 0 16,492,423 1,270,369 0 0

Interest is earned on current accounts at ﬂ oating rates based on daily bank deposit rates. Average interest rates earned is disclosed in note 31.

NOTE 5. TRADE AND OTHER RECEIVABLES Trade debtors 6,954,507 5,609,717 0 0 Other receivable 354,126 0 0 0 Less: Provision for doubtful debts (641,543) (398,608) 0 0 6,667,090 5,211,109 0 0

Trade debtors are non-interest bearing and generally on 30 day terms. An allowance for doubtful debts is made where there is objective evidence that a trade debtor is impaired.

NOTE 6. PREPAID RENT (CURRENT) Prepaid rent 65,880 65,880 0 0

NOTE 7. OTHER ASSETS (CURRENT) Prepayments 572,307 108,911 0 0

NOTE 8. OTHER FINANCIAL ASSETS (CURRENT) Interest rate swap contracts – cash ﬂ ow hedges 3,586,930 1,387,874 0 0

NOTE 9. OTHER FINANCIAL ASSETS (NON-CURRENT) From related parties 0 0 95,766,535 99,641,669

NOTE 10. PREPAID RENT (NON-CURRENT) Prepaid rent 5,863,327 5,929,207 0 0

Prepaid rent: Carrying amount at the beginning of the year 5,929,207 5,995,088 0 0 Portion amortised during the year (65,880) (65,881) 0 0 Carrying amount at the end of the year 5,863,327 5,929,207 0 0

ANNUAL REPORT 2006/2007 49 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007

CONSOLIDATED COMPANY 2007 $ 2006 $ 2007 $ 2006 $

NOTE 11. INVESTMENT PROPERTIES Investment properties – at fair value 119,906,400 47,132,956 0 0 Investment properties: Carrying amount at the beginning of the year 47,132,956 42,076,400 0 0 Additions 12,596,389 5,056,556 0 0 Transfer from infrastructure assets 1,175,000000 Net gain from fair value adjustment 59,002,055000 Carrying amount at the end of the year 119,906,400 47,132,956 0 0 Amounts recognised in the income statement for investment property Rental income 2,309,599 1,282,373 0 0 Direct operating expenses from property that generate rental income (33,779) (54,581) 0 0 Net income 2,275,820 1,227,792 0 0

Investment property was valued by RJ Gardiner CPV as at 30 June 2007. Mr Gardiner is an independent valuer who has extensive experience in valuing property for the entity. The value of investment property is measured on a fair value basis being the amounts for which property could be exchanged between knowledgeable, willing parties in an arm’s length transaction.

In assessing the value of the investment property, wherever an observable active market price (and/or market income stream) for a land and/or building asset was identiﬁ able, the “fair value” approach has been adopted primarily utilising the capitalisation of the estimated sustainable net annual market income.

Leasing arrangements The investment properties are leased to tenants under long term operating leases with rentals generally payable monthly. Minimum lease payments receivable on leases of investment properties are as follows: Minimum lease payments under non-cancellable operating leases of investment properties not recognised in the ﬁ nancial statements are receivable as follows: Within one year: 2,645,367 1,505,390 0 0 Later than one year but no later than 5 years 10,878,934 5,880,653 0 0 Later than 5 years 9,138,632 2,859,299 0 0 22,662,933 10,245,342 0 0

Contractual obligations Refer to note 27 for disclosure of any contractual obligations which include to purchase, construct or develop investment property or for repairs, maintenance or enhancements.

NOTE 12. INVESTMENTS Shares in subsidiary companies at cost 0 0 24 24

NOTE 13. INFRASTRUCTURE, PLANT AND EQUIPMENT Plant and Equipment Plant and equipment – at cost 7,391,662 5,563,263 0 0 Accumulated depreciation (4,938,636) (4,128,362) 0 0 Total Plant and Equipment 2,453,026 1,434,901 0 0 Infrastructure Assets Infrastructure assets under lease – at cost 141,671,913 131,159,731 0 0 Accumulated depreciation (26,042,857) (20,816,337) 0 0 Total Infrastructure Assets 115,629,056 110,343,394 0 0

50 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007

CONSOLIDATED COMPANY 2007 $ 2006 $ 2007 $ 2006 $

Work in progress 19,707,337 17,227,455 0 0

Total Infrastructure, Plant and Equipment 137,789,419 129,005,750 0 0

(a) Assets pledged as security The bank has a ﬁ xed and ﬂ oating charge over all present and future assets and undertakings of the company. The value of assets pledged as securities are: 257,695,819 176,138,706 0 0

(b) Reconciliations Plant & Equipment Carrying amount at the beginning 1,434,901 1,435,551 0 0 Additions 374,361 441,781 0 0 Transfer from work in progress 1,454,038 48,967 0 0 Disposals 0 (21,799) 0 0 Depreciation (810,274) (469,599) 0 0 Carrying amount at the end 2,453,026 1,434,901 0 0 Infrastructure Assets Carrying amount at the beginning 110,343,394 99,277,078 0 0 Additions 514,344 1,908,809 0 0 Transfer from work in progress 13,536,487 15,179,605 0 0 Transfer to investment property (1,175,000) 0 0 0 Depreciation (7,590,169) (6,022,098) 0 0 Carrying amount at the end 115,629,056 110,343,394 0 0 Work in progress Carrying amount at the beginning 17,227,455 17,299,517 0 0 Plant and equipment additions 560,003 930,324 0 0 Infrastructure additions 29,506,793 14,226,186 0 0 Transfer to investment property (12,596,389) 0 0 0 Transfers to plant and equipment (1,454,038) (48,967) 0 0 Transfers to infrastructure (13,536,487) (15,179,605) 0 0 Carrying amount at the end 19,707,337 17,227,455 0 0

NOTE 14. OTHER INTANGIBLES Lease premium 16,676,910 16,676,910 0 0 Provision for amortisation (1,530,002) (1,361,548) 0 0 15,146,908 15,315,362 0 0 Gross carrying amount Balance at the beginning of the fi nancial year 16,676,910 16,676,910 0 0 Other 0000 Balance at end of fi nancial year 16,676,910 16,676,910 0 0 Accumulated amortisation Balance at the beginning of the fi nancial year (1,361,548) (1,193,095) 0 0 Amortisation charged during the year (168,454) (168,453) 0 0 Balance at the end of the fi nancial year (1,530,002) (1,361,548) 0 0

ANNUAL REPORT 2006/2007 51 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007

CONSOLIDATED COMPANY 2007 $ 2006 $ 2007 $ 2006 $ Net book value At the beginning of the ﬁ nancial year 15,315,362 15,483,815 0 0 At the end of the ﬁ nancial year 15,146,908 15,315,362 0 0

NOTE 15. GOODWILL Gross carrying amount Balance at the beginning of the fi nancial year 13,963,732 13,963,732 0 0 Other 0000 Balance at end of fi nancial year 13,963,732 13,963,732 0 0 Accumulated impairment losses Balance at the beginning of the fi nancial year 0000 Impairment losses for the year 0000 Balance at the end of the fi nancial year 0000 Net book value At the beginning of the fi nancial year 13,963,732 13,963,732 0 0 At the end of the fi nancial year 13,963,732 13,963,732 0 0

Goodwill relates to the original acquisition of the airports.

Management have carried out calculations to test for impairment of goodwill and is of the opinion that no impairment of goodwill at Darwin International or Alice Springs Airport has existed since acquisition and it is appropriate to continue to carry goodwill forward at the same value it was initially booked on acquisition.

The recoverable amount of the cash-generating units, being, Darwin International Airport and Alice Springs Airport were assessed by reference to the cash-generating unit’s enterprise value.

The key assumptions used in the enterprise value calculations are as follows: • 15 year passenger numbers as forecast by BAA International Ltd (BAA) under the technical services agreement • Operating revenue assumptions based on agreed contracts where applicable • Operating expenditure assumptions are based on the budget and extrapolated using inﬂ ation multipliers for key expenses • Capital expenditure as agreed with stakeholders, with sustaining capital normalised over the long run model • Long run inﬂ ation of 2.5%

Allocation of goodwill to cash-generating units Goodwill has been allocated for impairment testing purposes to individual cash-generating units as follows: Individual cash-generating units • Alice Springs Airport • Darwin International Airport

The carrying amount of goodwill allocated to cash-generating units that are signiﬁ cant individually or in aggregate is as follows:

CONSOLIDATED

2007 $ 2006 $ Alice Springs Airport 3,072,207 3,072,207 Darwin International Airport 10,891,525 10,891,525

52 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007

CONSOLIDATED COMPANY 2007 $ 2006 $ 2007 $ 2006 $

NOTE 16. TRADE AND OTHER PAYABLES (CURRENT) Trade creditors 1,963,016 2,047,960 0 0 Interest accrued 6,894,259 39,885 0 0 Other creditors 5,989,572 6,182,435 0 0 Retentions and deposits held 214,133 78,794 0 0 Payments received in advance 158,917 150,752 0 0 15,219,897 8,499,826 0 0

Trade and other creditors are non interest bearing and normally settled on 30 day terms.

NOTE 17. BORROWINGS (CURRENT) Borrowings secured by ﬁ xed charge - Bank Overdrafts 0 549,706 0 0

The consolidated entity has access to a bank overdraft facility amounting to $3,000,000 (2006: $1,000,000) as part of the senior debt facility held in the name of Northern Territory Airports Pty Ltd. The bank has a ﬁ xed and ﬂ oating charge over all present and future assets and undertakings.

NOTE 18. PROVISIONS (CURRENT) Employee Benefi ts - Annual Leave 557,873 578,955 0 0 - Long Service Leave 516,884 469,540 0 0 - Other employee benefi ts 0 160,650 0 0 Provision for fringe benefi ts tax 35,437 37,294 0 0 1,110,194 1,246,439 0 0 Annual leave: Opening balance at beginning of year 578,955 522,358 0 0 Provisions raised during the year 354,724 392,019 0 0 Amounts utilised (375,806) (335,422) 0 0 Balance at end of the year 557,873 578,955 0 0 Long service leave: Opening balance at beginning of year 469,540 378,077 0 0 Provisions raised during the year 83,146 69,648 0 0 Portion transferred from non-current 0 43,542 0 0 Amounts utilised (35,802) (21,727) 0 0 Balance at end of the year 516,884 469,540 0 0 Other employee benefi ts: Opening balance at beginning of year 160,650 0 0 0 Provisions raised during the year 0 74,254 0 0 Portion transferred from non-current 0 86,396 0 0 Amounts utilised (160,650)000 Balance at end of the year 0 160,650 0 0 Fringe benefi ts tax: Opening balance at beginning of year 37,294 32,700 0 0 Provisions raised during the year 123,870 103,178 0 0 Amounts utilised (125,727) (98,584) 0 0 Balance at end of the year 35,437 37,294 0 0

ANNUAL REPORT 2006/2007 53 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007

CONSOLIDATED COMPANY 2007 $ 2006 $ 2007 $ 2006 $ NOTE 19. BORROWINGS (NON-CURRENT) Borrowings secured by ﬁ xed charge: - Senior debt 158,950,000 123,000,000 0 0 - Unamortised ﬁ nance costs (273,101) (546,206) 0 0 Total 158,676,899 122,453,794 0 0 Finance facilities Bank overdraft facility (a) 3,000,000 1,000,000 0 0 Amount of overdraft facility used 0 549,706 0 0 Senior debt facility (b) 220,700,000 220,700,000 0 0 Amount of senior debt facility used 158,950,000 123,000,000 0 0

(a) The consolidated entity has access to a bank overdraft amounting to $3,000,000 (2006: $1,000,000) as part of the senior debt facility held in the name of Northern Territory Airports Pty Ltd. For operational banking purposes balances are consolidated across the group. Interest rates are variable.

(b) The consolidated entity has a $220.7M senior debt facility which is due for repayment on 6 January 2009. The facility includes an aeronautical capital expenditure facility of $85.7M and a property development capital expenditure facility of $30M. Average interest charged for the year was 6.95%. The bank has a ﬁ xed and ﬂ oating charge over all present and future assets and undertakings of the consolidated entity but exclude the property which is located outside the Northern Territory or the Australian Capital Territory. The facility is governed by covenants including interest cover ratio, leverage ratio and a hedging strategy.

NOTE 20. PROVISIONS (NON-CURRENT) Long Service leave 111,085 100,384 0 0 Other employee beneﬁ ts 280,000 0 0 0 391,085 100,384 0 0 Long service leave: Opening balance at beginning of year 100,384 143,926 0 0 Provisions raised during the year 10,701 0 0 0 Transfer to current portion 0 (43,542) 0 0 Balance at end of the year 111,085 100,384 0 0 Other employee beneﬁ ts: Opening balance at beginning of year 0000 Provisions raised during the year 280,000 0 0 0 Balance at end of the year 280,000000

NOTE 21. CONTRIBUTED EQUITY Issued and paid up capital 40,765,344 ordinary shares of $1 each fully paid and issued on incorporation. (2006: $40,765,344) 40,765,344 40,765,344 40,765,344 40,765,344

2,000 redeemable preference shares of $10,000 each fully paid on incorporation. These comprise of a par value of $1 and a premium of $9,999 (2006: 2,000) 20,000,000 20,000,000 20,000,000 20,000,000 Total paid up capital 60,765,344 60,765,344 60,765,344 60,765,344

NOTE 22. RESERVES Hedging reserve – cash ﬂ ow hedge 0 263,682 0 0

54 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007

CONSOLIDATED COMPANY 2007 $ 2006 $ 2007 $ 2006 $ Movements: Balance at the beginning of the year 263,682 263,682 0 0 Movements (263,682)000 Balance at the end of the year 0 263,682 0 0

The hedging reserve is used to record gains or losses on a hedging instrument in a cash ﬂ ow hedge that are recognised directly in equity, as described in note 1(r).

NOTE 23. DIVIDENDS PAID (a) Dividends declared and paid during the year: Dividends on ordinary shares – fully franked 11,350,000 0 11,350,000 0 Dividend per ordinary share 27.8 cents 0.0 cents 27.8 cents 0.0 cents

Dividends on ordinary shares – unfranked 0 15,900,000 0 15,900,000 Dividend per ordinary share 0.0 cents 39.0 cents 0.0 cents 39.0 cents

At the date of issue of this report no other dividends were proposed or declared during the period. All dividends paid and declared during the period have been recognised in the ﬁ nancial statements. The directors have not yet made a recommendation for any further dividend for the year ended 30 June 2007.

(b) Franking account balance Franking account balance as at the end of the ﬁ nancial year at 30% (2006: 30%) 1,760,177 1,140,850 1,760,177 1,140,850

Franking credits that will arise from the payment of income tax payable as at the reporting date 2,385,897 3,031,369 2,385,897 3,031,369

Net franking credits available 4,146,074 4,172,219 4,146,074 4,172,219

NOTE 24. REMUNERATION OF DIRECTORS Income paid or payable, or otherwise made available, in respect of the ﬁ nancial year, to all directors of each entity in the consolidated entity, directly or indirectly, by the entities of which they are directors or any related party. 0000

NOTE 25. KEY MANAGEMENT COMPENSATION INFORMATION (a) Directors The names of persons who were Directors of ADGPL at any time during the ﬁ nancial year are noted in note 28. Information on remuneration of directors is noted in note 24.

(b) Other Key Management Personnel Executives who held offi ce during the fi nancial year were: Ian Kew – Chief Executive Offi cer Thomas Ganley – Chief Financial Offi cer and Company Secretary Brett Reiss – General Manager Commercial and Property (resigned 5 April 2007) John Diggins – General Manager Development, Operations and Maintenance Jim Parashos – Aviation Development Director (commenced 4 December 2006) Daniel Richards – Environment Co-ordinator (resigned 22 June 2007) Sarah Dewar – Commercial Projects / Finance Director Peter Roberts – Aviation Development Director (resigned 2 May 2007) Jill Holdsworth – Health, Safety & Environment Management Systems Coordinator (commenced 25 June 2007) Donald McDonald – General Manager Alice Springs and Tennant Creek Airport

ANNUAL REPORT 2006/2007 55 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007

CONSOLIDATED COMPANY 2007 $ 2006 $ 2007 $ 2006 $ (c) Total compensation paid to key management personnel for the fi nancial year Short term employee benefi ts 1,823,209 1,363,046 0 0 Superannuation contributions 190,395 149,937 0 0 Non cash benefi ts 0 99,700 0 0 Termination benefi ts 0 5,000 0 0 2,013,604 1,617,683 0 0

NOTE 26. REMUNERATION OF AUDITORS Remuneration of the auditors of the company for: Audit and review of ﬁ nancial statements of the entity and any other entity in the Consolidated entity 61,390 40,721 0 0 IFRS review 78,265 0 0 0 Tax compliance and advice 31,714 18,400 0 0 Other advice and services 21,010 18,460 0 0 192,379 77,581 0 0

NOTE 27. COMMITMENTS AND CONTINGENCIES (a) Capital commitments Commitments for the acquisition of investment property, infrastructure, plant and equipment contracted for at the reporting date but not recognised as liabilities, payable: Not later than one year 2,615,320 7,853,300 0 0

As part of its tender for the acquisition of the Darwin International and Alice Springs Airport leases, ADGPL’s wholly owned subsidiaries, DIAPL and ASAPL, committed to the Commonwealth Government to fund capital expenditure for aeronautical infrastructure and other improvements totalling a minimum of $4,449,000 during the 5 ﬁ scal years 1998 to 2003 inclusive and additional sums totalling $4,675,000 during the 5 ﬁ scal years 2004 to 2008. Both DIAPL and ASAPL have exceeded their capital expenditure commitments to 30 June 2007 and therefore met their development obligations as required on the acquisition of the airport leases.

(b) Legal claim Subsequent to year end, a claim has been made against ADGPL’s wholly owned subsidiary, DIAPL, to recover monies paid by a creditor to DIAPL where the creditor has since been placed in liquidation. Payments were made to DIAPL as an unsecured creditor prior to liquidation, in settlement of monies owed to DIAPL. At the date of this report, legal proceedings had not commenced against DIAPL, and should they do and the action be successful the estimated liability will be $150,000. DIAPL intend to defend the claim and believe there are reasonable grounds to do so. Accordingly no provision for any liability has been recognised in the ﬁ nancial statements.

NOTE 28. RELATED PARTIES Directors The directors of ADGPL during the ﬁ nancial year were:

NAME APPOINTED RESIGNED Mr Christopher Robert Wade 21 February 2003 8 June 2007 Mr Dominic James Helmsley 1 November 2003 31 August 2006 Mr Brett John Lazarides (Chair - RAAC) 30 January 2004 14 December 2006 Mr Peter Nolan Taylor 13 February 2006 16 August 2006 Ms Jill Louise Rossouw (Chair) 24 April 2006 28 September 2007 Ms Dunia Mary Wright 24 April 2006 30 May 2007 Mr Stuart James Condie 31 August 2006 8 November 2007 Mr Christopher Brian Woodruff (alternate director for Stuart Condie) 1 November 2006 18 July 2007

56 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007

NAME APPOINTED RESIGNED Mr Damian Moloney (alternate director for Dunia Wright) 5 December 2006 30 May 2007 Mr Robert Forte 14 December 2006 Mr Emilio Gonzales (alternate director for Robert Forte) 14 December 2006 1 November 2007 Mr Kyle Anthony Mangini 30 May 2007 Ms Dunia Mary Wright (alternate director for Kyle Mangini and Jill Rossouw) 30 May 2007 28 September 2007 Mr Peter James McGregor 8 June 2007 Mr Juan Aleman Bullon (alternate director for Stuart Condie) 24 July 2007 7 November 2007 Mr Chris Barlow (Chair) 2 October 2007 Mr Roger Lloyd (alternate director for Robert Forte) 1 November 2007

Remuneration Information on remuneration of directors is disclosed in note 25.

CONSOLIDATED COMPANY 2007 $ 2006 $ 2007 $ 2006 $ Wholly-owned group transactions Interest received and receivable 0 0 12,958,524 13,112,554 Aggregate amounts receivable 0 0 95,766,535 99,641,669 Aggregate amounts payable 0 0 3,007,103 4,097,689 Other related party transactions BAA International Limited DIAPL, ASAPL and TCAPL have entered into a consulting agreement with one of the shareholders of ADGPL, BAA International Limited. This is a commercially focused agreement and was executed on 29 May 2003. The agreement was terminated in November 2007. Total expenditure 2,255,877 1,936,467 0 0

NOTE 29. STATEMENT OF CASH FLOWS (a) Reconciliation of profi t after tax to net cash fl ows from operations Operating profi t after income tax 52,055,058 7,252,208 9,210,924 9,178,787 Depreciation and amortisation 8,634,777 6,726,031 0 0 Unrealised gain on interest rate swap (2,462,738) (476,863) 0 0 Fair value adjustment to investment property (59,002,055) 0 0 0 Net profi t on sale of property, plant and equipment 0 (4,110) 0 0

Change in operating assets and liabilities Other provisions 0 4,594 0 0 Provision for employee beneﬁ ts 154,455 178,772 0 0 Trade and other receivables (1,455,981) (592,765) 0 0 Current tax asset 0000 Prepayments (463,396) 39,185 0 0 Trade and other creditors and accruals 7,865,581 1,734,518 0 0 Other payables 0 0 (1,090,585) 383,094 Deferred tax liabilities 17,893,430 (1,633,733) 0 22,075 Income tax payable (645,472) 2,387,748 (645,472) 2,387,748 Deferred tax asset (123,700) (123,846) 0 0 Net cash ﬂ ow from operating activities 22,449,959 15,491,739 7,474,867 11,971,704

ANNUAL REPORT 2006/2007 57 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007

CONSOLIDATED COMPANY 2007 $ 2006 $ 2007 $ 2006 $ (b) Reconciliation of Cash Cash on hand 42,236 16,563 0 0 Cash at bank 16,450,187 1,803,512 0 0 Bank Overdraft 0 (549,706) 0 0 16,492,423 1,270,369 0 0

NOTE 30. SUBSIDIARIES Airport Development Group Pty Ltd, the ultimate parent entity, has the following wholly owned subsidiaries which are incorporated in Australia:

NAME % OF EQUITY INTEREST HELD BY THE CONSOLIDATED ENTITY INVESTMENT 2007 % 2006 % 2007 $ 2006 $ Northern Territory Airports Pty Ltd 100 100 12 12 Darwin International Airport Pty Ltd (a) 100 100 12 12 Alice Springs Airport Pty Ltd (a) 100 100 12 12 Tennant Creek Airport Pty Ltd 100 100 12 12

(a) Investments are held by Northern Territory Airports Pty Ltd.

NOTE 31. FINANCIAL INSTRUMENTS

(a) Financial risk management objectives Northern Territory Airports Pty Ltd (NTAPL) manages the ﬁ nancial risks relating to the operations of the consolidated entity and its subsidiary companies, including ADGPL.

The company does not enter into or trade fi nancial instruments, including derivative fi nancial instruments, for speculative purposes. The use of fi nancial derivatives is governed by the policies approved by the board of directors. Compliance with policies and exposure limits is reviewed by management on a continuous basis.

The consolidated entity’s activities expose it primarily to the ﬁ nancial risks of changes in interest rates. NTAPL has entered into derivative ﬁ nancial instruments, being an interest rate swap to manage its exposure to interest rate risk, on behalf of ADGPL and its entities.

(b) Signifi cant accounting policies Details of the signifi cant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of fi nancial asset, fi nancial liability and equity instrument are disclosed in note 1 to the fi nancial statements.

(c) Interest rate risk management The consolidated entity is exposed to interest rate risk as it borrows funds at both fi xed and fl oating interest rates. The risk is managed by maintaining an appropriate mix between fi xed and fl oating rate borrowings by the use of interest rate swap contracts. The consolidated entity has entered into fi xed to fl oating swap contracts.

Interest rate swap contracts Under interest rate swap contracts, the consolidated entity agrees to exchange the difference between ﬁ xed and ﬂ oating rate interest amounts calculated on agreed notional principal amounts. Such contracts enable the consolidated entity to mitigate the risk of changing interest rates on debt held. The fair value of interest rate swaps are based on market values at the reporting date and are disclosed below.

At 30 June 2007 the consolidated entity had the following interest rate swap agreements (pay ﬁ xed, receive ﬂ oating) in place:

NOTIONAL PRINCIPAL RECEIVE INTEREST RATE PAY INTEREST RATE (FIXED) FAIR VALUE MATURITY (FLOATING) 2007 $ 2006 $ 2007 % 2006 % 2007 % 2006 % 2007 $ 2006 $ 59,073,301 74,416,184 BBSW BBSW 5.02% 5.02% 972,704 1,387,874 10 Jun 2008 33,083,877 0 BBSW N/A 6.02% N/A 2,614,226 0 10 Jan 2011

58 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007 % note 2006 Refer Refer 31(c) % AVERAGE AVERAGE note EFFECTIVE WEIGHTED 2007 31(c) INTEREST RATE $ 2006 ,532 $ 0 549,706 0.00 8.85 2007 FINANCIAL POSITION 3,586,930 1,387,874 Refer AS PER THE STATEMENT OF AS PER THE STATEMENT 16,492,423 1,820,075 5.48 4.58 $ 2006 $ 2007 6,667,090 5,211,109 6,667,090 5,211,109 N/A N/A 6,667,090 5,211,109 26,746,443 8,419,058 NON-INTEREST BEARING CARRYING AMOUNT TOTAL 15,219,897 8,499,826 15,219,897 8,499,826 N/A N/A $ 2006 $ 5 YEARS 2007 $ 2006 $ 2007 158,950,000 123,000,000 158,950,000 123,000,000 6.95 6.40 158,950,000 123,000,000 15,219,897 8,499,826 174,169,897 132,049 FIXED INTEREST $ 0 2,614,226 1,387,874 RATE MATURING IN: MATURING RATE 2006 $ 2007 972,704 0 2,614,226 1,387,874 4 – 12 MONTHS OVER 1 – 5 YEARS MORE THAN 972,704 $ 2006 $ 0 – 3 MONTHS 2007

$ 2006 1,820,075 $ 0 549,706 2007 FLOATING INTEREST RATE nancial instruments 16,492,423 1,820,075 16,492,423 nancial inancial FINANCIAL F liabilities Financial Financial assets INSTRUMENTS ayables (ii) Total fi Total liabilities Bank loan – Senior debt P Bank overdrafts 0 549,706 (i) Cash and liquid assets Receivables – Receivables trade Interest rate swap Total Financial Financial Total Assets The following table details the consolidated entity’s exposure to interest rate risk as at 30 June 2007: Maturity profi le of fi Maturity profi

ANNUAL REPORT 2006/2007 59 NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2007

(d) Credit risk management Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in fi nancial loss to the consolidated entity. The consolidated entity has adopted a policy of only dealing with creditworthy counterparties and obtaining suffi cient collateral where appropriate, as a means of mitigating the risk of fi nancial loss from defaults.

Trade accounts receivable consist of a number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the ﬁ nancial condition of accounts receivable.

The entity has a material exposure to the major Australian domestic airlines.

The carrying amount of ﬁ nancial assets recorded in the ﬁ nancial statements, net of any allowances for losses, represents the consolidated entity’s maximum exposure to credit risk without taking account of the value of any collateral obtained.

(e) Fair value of fi nancial instruments The directors consider that the carrying amount of fi nancial assets and fi nancial liabilities recorded in the fi nancial statements approximates their fair values (2006: net fair value).

The fair values and net fair values of fi nancial assets and fi nancial liabilities are determined as follows: • the fair value of fi nancial assets and fi nancial liabilities with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market prices; and • the fair value of other fi nancial assets and fi nancial liabilities are determined in accordance with generally accepted pricing models based on discounted cash fl ow analysis. • the fair value of derivative instruments, included in hedging assets and liabilities, are calculated using quoted prices. Where such prices are not available use is made of discounted cash fl ow analysis using the applicable yield curve for the duration of the instruments.

Transaction costs are included in the determination of net fair value.

(f) Liquidity risk management The consolidated entity manages liquidity risk by maintaining adequate cash reserves and banking facilities and by continuously monitoring forecast and actual cash fl ows and matching the maturity profi les of fi nancial assets and liabilities.

60 DIRECTORS’ DECLARATION

In accordance with a resolution of the directors of Airport Development Group Pty Ltd, we state that:

(1) In the opinion of the directors: (a) The ﬁ nancial statements and notes of the company and consolidated entity are in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the company’s and consolidated entity’s ﬁ nancial position as at 30 June 2007 and of their performance for the year ended on that date; and (ii) complying with Accounting Standards and Corporation Regulations 2001; and (b) there are reasonable grounds to believe that the company will continue to pay its debts as and when they become due and payable

On behalf of the Board

Director Director

Place: Melbourne

Date: 10 December 2007

ANNUAL REPORT 2006/2007 61 Tel 61 8 8982 1444 Fax 61 8 8982 1400 Level 2 9-11 Cavenagh Street Darwin NT 0800 Australia GPO Box 3470 Darwin NT 0801 Australia www.meritpartners.com.au

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF AIRPORT DEVELOPMENT GROUP PTY LTD

We have audited the accompanying fi nancial report of Airport Development Group Pty Ltd (the company) and the entities it controlled during the year, which comprises the balance sheet as at 30 June 2007, and the income statement, statement of changes in equity and cash fl ow statement for the year ended on that date, a summary of signifi cant accounting policies, other explanatory notes and the directors’ declaration.

Directors’ Responsibility for the Financial Report The directors of the company are responsible for the preparation and fair presentation of the fi nancial report in accordance with the Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal controls relevant to the preparation and fair presentation of the fi nancial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. In Note 1(a), the directors also state that the fi nancial report, comprising the fi nancial statements and notes, complies with International Financial Reporting Standards.

Auditor’s Responsibility Our responsibility is to express an opinion on the ﬁ nancial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the ﬁ nancial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial report. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the fi nancial report, whether due to fraud or error. In making those risk assessments, we consider internal controls relevant to the entity’s preparation and fair presentation of the fi nancial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the fi nancial report.

We believe that the audit evidence we have obtained is sufﬁ cient and appropriate to provide a basis for our audit opinion.

partners Amin Islam Rosemary Campbell Matthew Kennon Steven Lai Independence In conducting our audit we have met the independence requirements of the Corporations Act 2001. We have given to the directors of the company a written Auditor’s Independence Declaration, a copy of which is included in the directors’ report. In addition to our audit of the ﬁ nancial report, we were engaged to undertake the services disclosed in Note 26 to the ﬁ nancial statements. The provision of these services has not impaired our independence.

Auditor’s Opinion In our opinion: 1. the fi nancial report of Airport Development Group Pty Ltd is in accordance with: (a) the Corporations Act 2001, including: (i) a true and fair view of the fi nancial position of Airport Development Group Pty Ltd and the consolidated entity at 30 June 2007 and of their performance for the year ended on that date; and (ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations); and (b) other mandatory fi nancial reporting requirements in Australia.

2. the ﬁ nancial report also complies with International Financial Reporting Standards as disclosed in Note 1(a).

Merit Partners

Matthew Kennon Partner

Darwin Date:

partners Amin Islam Rosemary Campbell Matthew Kennon Steven Lai This page has been left blank intentionally

64 FAST FACTS

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REGISTERED OFFICE Airport Management Centre

1 Fenton Court DevelopmentGroup|ANNUALAirport REPORT 2006/2007 Marrara Northern Territory 0812 Tel: +61 8 8920 1811 Fax: +61 8 8920 1800 Website: www.ntapl.com.au

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